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JEREMY MAGGS: Now, despite problems that South Africa is facing on multiple fronts, a polycrisis, according to the risk industry, there is, we read, a trend of South Africans now returning home, and Bronwyn Williams is with us now from the agency Flux Trends. Bronwyn, a very warm welcome to you. Two quick questions. What is driving this trend, and are you seeing a real momentum here?
BRONWYN WILLIAMS: Ja, I’ll start with the second part. Where this trend came up was there were essentially two sources. One being the Tax Practitioners Association, the other one being the real estate agents around the country, and in Johannesburg in particular, both picking up that there is a hard data pattern in South African terms, actually quite well-off individuals returning to South Africa, or de-immigrating (sic), whatever you want to call it. In other words, high-net-worth individuals coming back home.
As to why it’s happening, well, we’ve just got to look at the world around us, the arbitrage condition of the general state of the world. South Africa is quite a cheap place to live, particularly if you have some money, we know this. We know that foreign nationals also come and retire here or live here, or if our government allows them to work on a digital nomad kind of a basis, although we don’t actually encourage that.
We’re quite an attractive destination for people who have money because if you’ve got money, you can largely insulate yourself from all the challenges you’ve just discussed, right?
You can go and live in, as I’ve said publicly before, a neo-feudal kind enclave, behind a nice walled garden. You can have your armed guards patrolling your little slice of paradise. You can have your own private schools within those walls, your own places of work. You don’t have to actually leave and deal with the mess around us. You can have off-grid water and off-grid electricity. You can bypass all those problems if you have enough money. If you have forex that you bring to South Africa, that arbitrage condition is a no-brainer. So it makes economic sense if you’ve got the money and the means.
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As to why now, well, there’s an interesting pattern there in that quite a lot of people left South Africa, who had at least the means to go away post-apartheid, almost like an insurance policy against decline in South Africa. They took their families offshore, went to places like Australia and the UK and Europe and the Americas, and they stayed long enough essentially to get permanent residency. That wave of people now has that second passport. They have that backup plan, that insurance plan they didn’t have 10, 20 years ago, and now they’re coming back because again, this place is a great place to live, even if it seems precarious, and even if things could turn on a dime, if you have a backup plan, you’ve got some cash offshore and you’ve got a second passport. That’s the cynical view but the timelines do check out there.
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JEREMY MAGGS: I suppose for another cohort, it might also be a reality of people who simply can’t afford to live overseas anymore, and in many respects are forced to come back even with their tail between their legs and say, ‘Well, we tried it, but we just couldn’t make it’.
BRONWYN WILLIAMS: Well, I would probably push back on that a little bit, although I’m sure there are some that do fall into that category, in that if you haven’t made it over there, it’s just as expensive to come back home as it is to move away from South Africa and go to some other place.
Immigrating is not cheap, and quite frankly, most of the people who have been disappointed financially with their prospects offshore simply cannot afford to return back.
You’re stuck where you are once that lifeline is cut off. So I think that that’s a much smaller group that we are talking about there.
JEREMY MAGGS: What about that old driver called homesickness?
BRONWYN WILLIAMS: That’s true. So this is something I’ve spoken about a bit, so it’s a more soft one. This is purely much more speculative but there is quite a big distinction in culture between, particularly now talking about places like Europe and Australia, and that of South Africa. In that South Africa is obviously very home orientated across all of our different racial and demographic groups. We are quite home-bodied (sic) and we are quite tied to our families and to our communities. We have deep co-dependency ties here, largely because we have a government that doesn’t work and function for us.
We have to rely on our communities for borehole water, when Joburg runs out of water, for example, we rely on our neighbours.
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We often have intergenerational families staying in homes, whereas South African expats that go to places like Europe, like Australia, will find themselves isolated from those deep ties and communities they’ve had, but also find themselves in a society that doesn’t even have those deep ties for themselves. In that in a lot of those European countries in particular, there’s a sense that we don’t depend on our neighbours or even our family members. We actually depend on the government because the government does actually deliver, which has quite an isolating and insulating effect.
It’s quite a … type society, as the way you describe it, which is quite difficult for someone who’s come from a community that’s very community-driven to get those deep ties that you miss when you no longer have them, but wouldn’t necessarily notice if you’d grown up in those sorts of communities. So there is a culture shock element there.
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JEREMY MAGGS: I’m wondering if any work or any thinking has been done around the impact of expatriates coming back to South Africa in terms of the skills and experience they bring back, given the porosity of skills that we have in this country, that must be on the plus side of the equation, surely.
BRONWYN WILLIAMS: That’s probably something we are going to see. It is important to note that this sort of trend here, although it is significant, we are talking (about) almost a third of the people who left are coming back, it’s a large amount of people. There’s obviously churn, and more people are leaving and going at this point in time, but it’s a large chunk who’ve come back.
That coming back trend, that trend line is quite recent. We really are talking in the last year or so. So you wouldn’t have seen those impacts yet.
But logic would tell us that those expats coming back home, or let’s call them financial immigrants, like we would if they were from other parts of the world, let’s be fair there, are coming back with at least some business ties and contacts that they would’ve made in their careers surviving in these other countries for the last few decades. Which means it is going to give us, as a whole, a community, greater lines for import, for export, for international trade doors that could be opened.
It would be very much up to us, of course, as to how welcoming we are for those prodigal sons and daughters as they return, whether we get to benefit from those new opportunities that have been opened up.
JEREMY MAGGS: I’m just wondering about the whole notion of reassimilation into South African society then. You cynically mentioned boreholes; that’s one thing, I guess, people have got to start considering. It is a different country that people are coming back to. What advice would be given to those who have lived abroad, who are now considering returning home, but given it is certainly not the same place that it was 20 or 30 years ago?
BRONWYN WILLIAMS: Ja, I think that there are people who go and plan on going and become quite resentful of their home countries and leave and don’t turn around, not like Lot’s wife, just keep on walking, don’t look back. But I think the sort of people who are coming back have opportunities, as I said, I disagree that this is largely people who have failed overseas. I think it’s quite the opposite. I think it’s people who have succeeded, who have built ties, built opportunities and built up enough capital to come back and actually live a much better quality life than what they left.
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That is also a slightly cynical point of view. Is this fair? Is it fair that people who ran away when times were tough get to come back and essentially have better living standards than the rest of us? That could be a challenge for assimilation, but I think most people coming back are coming back because they want to be here. Certainly no one is coming back, or very few people are coming back because they don’t have options.
Certainly, if you’re looking at the real estate trends, the properties that these people are buying, and again, we’ve got the data there. It’s very much the R3 million to R6 million-plus properties. These are not people who are struggling, these are options. They know what they’re getting in for, they understand the trade-offs. Most of those people would’ve kept in touch with the news and perhaps will actually be pleasantly surprised at how life does carry on once you’ve got your solar panels installed and your guards at the gate. As I said, the living standard here is still favourable compared to perhaps what they would’ve left behind.
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JEREMY MAGGS: And just quickly, are there specific regions or countries from which South Africans are returning in larger numbers?
BRONWYN WILLIAMS: It does appear to be generally around the European continent, that sort of space. But that’s generally where most people left to. So I think that’s an unfair comment to make. It’s just that [for] most people, that was the most popular exit direction. So yes, that’s going to be the biggest bulk of people coming back.
JEREMY MAGGS: Appreciate your time, Bronwyn Williams, a futurist at Flux Trends.
