The Nigerian government has commenced the evacuation of its citizens from South Africa following a wave of xenophobic attacks that have left dozens dead and hundreds of businesses looted. In a move that underscores the fragility of intra-African relations, the first of two chartered Air Peace flights departed Johannesburg for Lagos on Wednesday, carrying 187 evacuees. President Muhammadu Buhari’s administration has condemned the violence, which it attributes to ‘criminal elements’ targeting foreign-owned shops, and has warned of retaliatory measures against South African interests in Nigeria. But the crisis is not merely a bilateral spat. The United Kingdom’s Foreign Office has issued a stark warning that the unrest could trigger a new wave of migration from sub-Saharan Africa to Europe, exacerbating existing pressures on the Continent’s borders.
The exodus from South Africa is a symptom of a deeper malaise. The country’s economy, Africa’s most industrialised, has been stagnant for a decade, with unemployment hovering around 30 per cent and youth joblessness exceeding 50 per cent. Against this backdrop, immigrants from Nigeria, Zimbabwe, and other nations have become scapegoats for frustrated locals. The attacks, which began in Johannesburg’s central business district, have spread to Pretoria and Durban, prompting Nigeria, Malawi, Zambia, and others to repatriate their citizens. For the City of London, this represents a troubling divergence from the narrative of ‘Africa Rising’ that has lured pension funds and private equity into the continent’s bond markets over the past decade.
The UK’s warning is grounded in hard numbers. According to the UNHCR, over 70,000 refugees and migrants have crossed the Mediterranean into Europe so far this year, a figure that is already higher than the same period in 2022. A destabilised South Africa, the region’s economic anchor, could accelerate this flow. Home Office modelling suggests that a prolonged crisis could push an additional 100,000 people toward Europe’s southern borders within twelve months, straining resources and fuelling populist sentiment. The British government has already allocated £1.2 billion to manage Channel crossings and asylum processing, a figure that looks precarious if the situation deteriorates.
From a fiscal perspective, the evacuation comes at a cost. Nigeria’s government, already grappling with a widening budget deficit and a naira under pressure, has authorised emergency spending of 2.5 billion naira (£5 million) for the operation. Meanwhile, the South African rand has weakened by 3 per cent against the dollar since the attacks began, as foreign investors reassess the risk premium attached to the country’s sovereign bonds. Yields on the benchmark 10-year gilt have edged higher in sympathy, a reminder that capital flows are ever sensitive to political contagion.
The broader implications for African migration are troubling. The UK Foreign Office’s statement, which warns of a ‘potential humanitarian crisis spilling over into North Africa and Europe’, echoes the language used during the 2015 migrant surge. That episode saw over one million arrivals, many fleeing conflict in Syria and Iraq. This time, the drivers are economic and political: a South African downturn compounded by anti-immigrant violence. The EU’s response, a mix of border fortification and aid to transit countries, is unlikely to stem the tide if conditions worsen.
Market participants are watching closely. The London-listed ETF tracking Nigerian equities has fallen 8 per cent in the past week, while the African-centric Ashburton Africa ex-SA equity fund has seen net outflows of $45 million. ‘The narrative is shifting from opportunity to risk,’ notes a fund manager at Baillie Gifford, who requested anonymity. ‘Investors are recalibrating their exposure to sub-Saharan Africa, and events in South Africa are the catalyst.’
For central bankers, the crisis introduces another variable into an already complex equation. The Bank of England, wary of inflation imported via higher food prices, has maintained a hawkish stance. But a migration shock could dampen consumption and depress growth, forcing a recalibration of monetary policy. The MPC will be watching the next UK jobs report for signs of labour market slack, a key input for wage inflation.
The evacuation serves as a stark reminder that economic integration in Africa is a double-edged sword. While it fosters trade and investment, it also exposes nations to the fallout of instability in neighbouring states. Nigeria’s decision to pull out its citizens is fiscally responsible in the short term, but it risks isolating Lagos from Johannesburg, two of the continent’s largest economies. The long-term cost could be a loss of trade and capital flows, a price that both countries can ill afford as they seek to finance their development needs.
As the Xinhua news agency reports, the Chinese government has also issued a travel advisory for its citizens in South Africa, adding to the sense of a region in turmoil. For Alastair Thorne, the bottom line is clear: when capital flight and migration coincide, the market’s invisible hand can become a clenched fist. The UK’s warning is not hyperbole. It is a sober assessment of the risks that lie ahead, risks that investors and policymakers ignore at their peril.
