I've never read that, but I wasn't there. Maybe the inevitable effect of Nyerere's socialism hadn't taken effect.
What evidence do you have that people preferred South Africa to Tanzania?
A "divestment" campaign was never necessary to overturn the government in Tanzania. No one invested in Tanzania except a handful of Communist countries, and half-heartedly at that. A tell-tale sign that people weren't killing themselves to get into prosperous, wonderful Tanzania is that the border with Kenya was unguarded for vast stretches. South Africa, on the other hand, had people trying to get in illegally all the time.
The comparison to Chile is a counterfactual one. It would be nice if we could say that such a transition would have happened, but there is no way to prove that such a transition would have happened.
There's no way to prove it, but so what? The result of overthrowing a country and looting its productive land and industry is always a disaster, except for the looters-in-chief. And it has been so.
Before they threw in the towel, the Boers were making reforms constantly, for all the good it did them. Creating autonomous homelands might well have worked, if they'd been capitalist. Which probably was why the ANC couldn't stand the idea.
Some wanted to go there because wages were higher, not because the quality of life was better.