ANC’s mafia state is bleeding the national economy R155 billion every year

27 September 2023

"The deplorable actions of ANC politicians lends credence to the view that for as long as the ANC remains in power, organised criminal networks will continue to operate with impunity and could render South Africa ungovernable."

The DA is appalled by the latest crime statistics released in the 2023 Global Organised Crime Index (GOCI) which show that South Africa now ranks 7th in the world out of 193 countries and 3rd in Africa for mafia-style criminal networks and organised crime syndicates.

The systematic degradation and hollowing out of South Africa’s law enforcement agencies by the ANC government has turned the country into a haven for organised crime syndicates who are threatening to overrun every sector of the economy.

Using data from think tank organisations and public statements by government officials, the DA was able to establish that organised crime syndicates - who include the Eskom mafia, illegal mining networks, wildlife syndicates, public infrastructure stripping networks, and the construction mafia among others, are bleeding the national economy of R155 billion every year. The breakdown is as follows:

The R155 billion is a conservative figure as it only reflects the direct costs incurred by the state or legitimate players in that specific sector as a result of the operations/activities of criminal networks. It does not factor in the knock-on effects that these crimes have on the economy, for example:

Telkom, Eskom, the Passenger Rail Agency of South Africa and Transnet once revealed that the persistent challenge of cable theft and infrastructure vandalism had a R187 billion knock-on effect on the economy per annum;

The Minerals Council South Africa estimates lost sales, taxes and royalties of R21 billion a year through illegal mining.

With these grim statistics, it does not help that the South Africa’s law enforcement agencies are struggling or unable to effectively deal with the problem of organised crime. According to GOCI, which also measured a country’s ability to deal with organized crime, South Africa’s score of 5.63 places it at 49th in the world, third in Africa, and first in the Southern African region.

In 2022, the NPA cautioned that with the weakening of the criminal justice in the state capture era, South Africa had become a bonanza for organised criminals and a broad range of illicit actors.

The first step in addressing the scourge of organised crime in South Africa is for law enforcement organisations to officially designate these criminal activities as national priority crimes. Organised criminal gangs pose a direct threat to the national interest and if left unchecked, would continue to exact a significant cost to the economy through lost jobs and declining investment. As such, the Directorate for Priority Crime Investigations (Hawks) should use its authority in terms of Section 17D of the South African Police Service Act, 1995 to officially designate organised crime syndicates as national priority crimes.

Law enforcement incapacity is precisely why criminal networks, also emboldened by the alleged involvement of high ranking politicians, have become brazen and are practically holding the state to ransom.

Recently, it was reported that the KZN MEC for Public Works and Human Settlements, Sipho Nkosi, took the outrageous decision to meet and negotiate with construction mafia groups in the Province. The same groups were said to be demanding R5 million for allegedly protecting the Durban City Hall from being blown up. ANC councillors were allegedly putting pressure on the council to make the payment.

The deplorable actions of ANC politicians lends credence to the view that for as long as the ANC remains in power, organised criminal networks will continue to operate with impunity and could render South Africa ungovernable.

The ANC has not only failed to the growing threat of crime across the country, it now seeks to negotiate with the same criminals who have brought construction sites to a standstill, pillaged Eskom and are demanding extortionate "protection fees" from the state. South Africans should reject the ANC’s shameful approach of trying to mollycoddle these criminal gangs when it is clear that they now pose an existential threat to South Africa’s democratic institutions, economy and people.

Issued by Dion George, DA Shadow Minister of Finance, 27 September 2023