The South African economy is grappling with a significant visa bottleneck, as tens of thousands of foreign executives, engineers and other key workers face a prolonged one-year visa wait, which business groups warn is costing investment and jeopardizing the country's standing as a continental hub.

Already suffering from lackluster growth and high unemployment, the government has acknowledged that a skill shortage is throttling development.

And a huge backlog in visa processing has worsened the problem.

Long visa waits are common in much of the world, but South Africa has some of the biggest jams, business groups say.

"We have various cases of people who have been waiting for more than a year," said Pamina Bohrer, secretary-general of the Italian-South African Chamber of Trade and Industries.

Besides the "psychological stress" caused to families whose lives are put on hold, firms are suspending or scrapping expansion plans in the country, she said.

"The backlog is staggering," Busisiwe Mavuso, head of Business Leadership South Africa, which groups dozens of international companies, including BP, Nestle and Unilever, wrote in a newsletter in November.

"The fact that companies can't fill the positions means they can't invest and expand."

'Critical' skills backlog

Home Affairs Minister Aaron Motsoaledi told a parliamentary committee in September that severe understaffing meant 74,000 applications for all types of visas were awaiting processing.

The ministry did not reply to a request for comment on the latest figures.

However, concerns have surged since the coronavirus pandemic.

In 2021, only 3,047 critical skills visas were processed, down 45% from 2019, according to official figures. About two-thirds were rejected.

At a time when South Africa badly needs skilled workers, its vetting is cumbersome and erratic, experts say.

Applicants have to provide medical reports, criminal records and travel plans. Business groups complain about inconsistent decision-making.

Some applications are processed in weeks while others languish, they said. In some cases, applicants get a permit, but their spouses do not.

Some are refused for minor issues like a missing phone number.

'Uncertainty'

A team tasked by President Cyril Ramaphosa to investigate visa delays said South Africa needs engineers, information technology experts and managers.

But getting a work visa can take 48 weeks or longer, it said. Waiting times in Nigeria and Kenya were more than four times shorter.

An entrepreneur replying to an anonymous survey by the EU Chamber of Commerce in South Africa last year said the visa quagmire pushed his firm to choose Ghana for a new Africa market office.

"My company would like to further expand in South Africa ... but uncertainty on visas has put a temporary hold on this expansion," the entrepreneur wrote.

In a report published last year, the team highlighted how every new skilled worker creates jobs for less qualified labor. A 1% increase in skilled immigration could increase gross domestic product (GDP) by 1.2%, it said.

Already hobbled by widespread power cuts and troubles running ports and the rail network, the economy is expected to grow by only 0.8% this year, according to the central bank. Unemployment is at 32%.

The team recommended reforms, including new visas for remote workers and startups, along with a points system and a trusted employer scheme to ease hiring.

Authorities said proposed changes would soon be announced.

But with the 2024 elections looming, some believe the wait could get longer.

Many South Africans blame immigrants, particularly from neighboring countries, for the high jobless rate and increased crime.

The government's security-oriented approach to immigration undermines official efforts to attract investment, said Jakkie Cilliers of the Institute for Security Studies think tank.

"We have a Department of Home Affairs and a Department of Labor that actively work to frustrate foreigners coming to South Africa," Cilliers said, noting that his firm is also struggling to secure visas for staff.

This month, Mavuso Msimang, the head of the presidential study group, condemned "endemic corruption" that he said was leaving businesses "failing, downsizing or simply deciding not to invest anymore."