A challenge much more destructive than Eskom’s loadshedding confronts South Africa

By: Stef Terblanche

There is a threat much bigger than Eskom and electricity collapse challenging South Africa. It has spread like an uncontrollable cancer and threatens to destroy our country. It’s far more costly than loadshedding, is all-pervasive, and is taking an immense economic and social toll.  It’s called crime. And we seem to be losing the battle against it.

Every time a major economic think-tank or the likes of the IMF, the World Bank or the global ratings agencies release a new assessment of South Africa’s economic condition, Eskom, loadshedding and the resultant threat of a debt trap are singled out as the biggest challenge that could seriously damage or even collapse the economy, and by implication could destroy the democracy. Crime is lucky if it earns a fleeting remark, and yet it is so much worse, so much more pervasive. Just consider the following:

• A 2022 Greater Good SA report puts the cost of crime in South Africa at R230-billion per year, or around 5% of GDP.
• The Institute for Economics and Peace (IEP) recently released the 2023 Global Peace Index (GPI) which estimated that violence – which includes multiple types of violent crimes – cost South Africa US$176.49 billion (R3.30 trillion) in 2022. Of this, the South African government spends close to US$67 billion per year to combat violent crime alone.
• Finance Minister Enoch Godongwana recently told delegates to a public event that the World Bank’s tracking system had showed that South Africans spend 10% of GDP – around R640 billion – per year to be safe amidst rampant crime and social unrest.
• In September 2021, South Africa’s Special Investigating Unit told Parliament that R14.8 billion associated with COVID-19 spending from April 2020 to June 2021, was being investigated for procurement irregularities.
• In 2021, research by Stellenbosch University’s Centre for Complex Systems in Transition done for an initiative led by the South African Institute of Chartered Accountants and business leaders found that R1.5-trillion was lost to the economy between 2014 and 2019 due to corruption.

Now compare these shocking figures to the estimated mere R1.2 trillion that Eskom’s loadshedding has cost South Africa over the past 16 years (2023 costs excluded), or R75 million per year over that period. This figure was submitted to a full bench of the Gauteng High Court in Pretoria in March to support an application by political parties and civil society organisations to have the court force the government to end load shedding. Note that this figure covers 16 years compared to the crime costs above which, with the exception of the last figure, indicate annual costs and losses.

A more immediate Eskom cost to taxpayers and the economy is contained in the government’s decision earlier this year to relieve Eskom of R254 billion of its R422 billion debt over the next three years. It is this cost that is frequently highlighted by ratings agencies and the IMF, among others, in warnings over increased debt and the resultant threat to the economy, while they say little or nothing about the impact of crime.

Corruption, however, is regularly singled out as a stand-alone crime and a big threat. And while the cost and economically debilitating impact of corruption – especially since the state-capture years – has been and is still immense, we shouldn’t lose sight of the fact that corruption is but one type of crime under the umbrella of many more manifestations of crime that together have a far, far greater disruptive and destructive impact.

We also often lose sight of the fact that much of Eskom’s loadshedding woes are caused by crime: cable and equipment theft, sabotage, corruption and more. For instance, Eskom

Loses around R7 billion annually due to copper theft, plus R2 billion to replace stolen cables. So, the cost of these should be added to the crime bill rather than the Eskom/loadshedding bill, one might argue.

While the above crime-cost figures do vary in many respects and it is not always easy to quantify the true financial cost of crime to South Africa in every respect, these figures cover different aspects or views of the same thing and are based on available, tangible evidence. They do therefore provide a credible window onto the cost of crime in South Africa.

However, the only time crime figures and costs seem to gain any real, prominent attention in South Africa is when shock events occur, such as the release of the latest crime statistics which among others show more than 6,000 murders over 3 months; or when large-scale rioting and looting and destruction of businesses occurs as in July 2021; or when 21 road freight trucks are torched over 5 days on major South African highways. In between these shock events it’s back to crime as usual… across a wide array of crimes with immensely damaging impacts and really totally inadequate attention being paid.

Crime contributes to other crises and issues

When it comes to South Africa’s many other extremely costly crises and challenges – water and sanitation issues, the logistics/transport crisis, infrastructure deterioration, collapsing municipalities, to name a few – we also lose sight of the fact that in each case crime is also a major contributing factor to those. For example, the logistics crisis is caused partially by poor Transnet management but also significantly by cable theft, theft of other railway equipment, vandalism, cargo heists, container thefts/break-ins, and corruption.

In similar vein, Transnet Freight Rail reported a 177% increase in copper theft incidents over the past five years, while the estimated illegal mining and export of chrome ore stands at nearly 1 million tons per year, or more than 10% of South Africa’s legal chrome output. The Agri SA 2018 National Agricultural Sector Crime Survey reported the total direct cost of agricultural crime in South Africa in 2017 amounted to R5,45 billion, while replacement costs as a result of agricultural crime added up to around R2,3 billion. These figures, that exclude the costs of farmers protecting themselves and their farms, have most likely increased significantly by now.

The full spectrum of crime

To fully grasp the immense extent and scope of crime in South Africa, one needs to look at the full spectrum of crime and the range of different criminal activities to which South Africans are being subjected daily.  Apart from ‘ordinary’ crimes like theft, housebreaking, shoplifting, common assaults, traffic offences, and such, the list of serious criminal activities is extremely long and covers inter alia murder, rape, vehicle hijackings, taxi violence, cash-in-transit heists, cashpoint robberies, farm attacks, agricultural and stock theft, kidnapping, criminal gang activities, various syndicate operations, construction and other sectoral mafias and syndicates, bank and credit card fraud, building hijackings, illegal mining, asset stripping, cybercrime, vehicle theft syndicates, illicit alcohol and cigarette smuggling, arson, looting of various types of infrastructure, electricity and fuel theft, drug smuggling and consumption, wildlife poaching and trade, gold and diamond smuggling, protected marine life poaching, a variety of scams and Ponzi schemes, violence against women and children, burning down of state buildings and other property, extortion and racketeering, and a variety of corruption activities among many more. There is not a single sector in South Africa or a single community that is not seriously affected by multiple varieties of crime.

New types of crimes are being added to the list almost every day. For instance, as South Africans adjusted to Eskom’s loadshedding by purchasing expensive rooftop solar panels and other renewable energy equipment, criminal gangs soon spotted an opportunity. Now, rooftop solar panels are being stolen from private homes and business premises almost as fast as they are installed, with the stolen goods sold on a lucrative black market.

Prison gangs and their affiliated gangs outside the prisons are terrorising poorer communities day and night, with many children and innocent bystanders dying in the crossfire of their turf battles. Every type of mafia in the world has found a foothold in South Africa, ranging from the Italian mafia to the Russian mafia, the Moroccans (as they are called), the Bulgarian crime syndicates, the Chinese triads and more. Many of them are in cahoots with local gangs like the Americans, Fancy Boys, Hard Livings, and others. Nigerian and Cameroonian cartels run the drugs trade and prostitution in every South African city.

Assassinations are the order of the day. Just recently four Bulgarian nationals died in an assassination hit in an upmarket Constantia house in Cape Town. Similar hits – often in broad daylight on busy public roads – have over the years cost the lives of a Russian mafia crime boss and his child, other East European crime bosses, multiple local gang bosses, lawyers, and even high-ranking police officers.

The Czech mafia boss Radovan Krejčíř is serving a 35-year prison term in South Africa, having left a trail of dead and disappeared people in the wake of his activities. International Italian mafia kingpin Vito Palazzolo for many years lived a life of luxury and protection in South Africa on the run from Swiss and Italian police before eventually being sent back. The question arises: why are these criminals even allowed into South Africa in the first place, let alone to conduct their dirty business here? Many among us, including the government, say they are concerned over the presence of undocumented African foreigners, but nothing is said or done about these international crime thugs operating freely in our midst.

Then there are the criminal syndicates involved in international illicit trade on multiple fronts, including but not limited to, alcohol, cigarettes, fishing, mining, counterfeit electronics, pharmaceuticals, food, and apparel. The Transnational Alliance to Combat Illicit Trade (Tracit.org), an independent international private sector initiative, says the World Economic Forum (WEF) believes the problem is significant enough that illicit trade poses a ‘top 5’ risk to the South African economy. This means this type of crime alone finds itself in the company of Eskom and loadshedding when it comes to risk.

The South African Revenue Service (SARS) estimates that illicit trade costs the South African economy R100 billion annually. Resulting from this, Business Leadership South Africa (BLSA) estimates that the country loses around R250 million a day in lost tax revenues. And the OECD estimates that South Africa is losing US$3.5 billion to US$5 billion a year, or more than 1% of GDP, to illicit financial flows.

There is much more one can detail to make the point of how big a crisis South Africa’s crime situation is, but space here does not permit. Nonetheless, the above are some of the physical and financial attributes and impacts of crime in South Africa. But what about the many other impacts, direct and indirect?

Other impacts of crime

First and foremost, South Africa’s crime profile is a proven deterrent to investment coming into the country, while it is causing many businesses to close and an outflow of capital, skills, experience and qualifications across multiple sectors. Which means the economy cannot grow as it should and jobs cannot be created. Crime thus directly contributes to more poverty and an unemployment rate of almost 33% (narrow definition) with youth unemployment standing at 51.52% in 2022. It can safely be assumed that this situation in turn contributes to more crime – a vicious circle. In addition, businesses are losing money due to theft, vandalism, violence, illicit trade, and asset stripping, among other things.

According to a research report, The High Cost Of Crime In South Africa, released in December 2022 by the public service organisation Greater Good SA, crime creates social injustice as it disproportionately affects poorer communities, and is the cause of social breakdown for those who commit crimes resulting in likely literacy problems, unemployment, and drug abuse. Crime furthermore results in lost productivity as a result of absenteeism, illness and injury, and crime reduces the value of property and raises the cost of insurance. For individuals, businesses and communities, apart from the financial costs, there are also huge health, social and psychological consequences from crime. These are just some of the social costs of crime – there are many more.

So, what is the answer?

It boggles the mind, that with such an immense problem tearing into the very fabric and existence of this country, there has never been the political will to construct and launch a concerted, holistic and coordinated large-scale plan to bring crime in all its facets under control, and to seize back the country and our towns from the criminals who have taken over.

Gareth Newham, Head of Justice and Violence Prevention at the Institute for Security Studies (ISS) told Forbes Africa earlier this year that over the last 5 to 10 years the crime statistics have not indicated any improvement in the crime situation. The reason, he says, is the lack of political leadership and policy and strategy around reducing crime.

But it’s not that the government is not trying to deal with this immense crime problem – its just that there are so many holes to plug, with new ones constantly appearing, that it cannot keep up. Worsening the problem is that while some efforts are made to combat some types of crimes, political will is often lacking to do this successfully or convincingly, while those who are in charge of dealing with different facets of the problem are often out of their depth.

The SA Police Service (SAPS) is the first line of defence against crime, but the force is notoriously ill prepared, poorly trained, poorly managed, and ill equipped for the task. It has had a succession of criminally corrupt or otherwise compromised national commissioners. Corruption, criminality, and inefficiency is rife throughout the SAPS. Serious questions have also been raised in a number of quarters over current ministerial capability in the political management of the police.

The SAPS has around 200 generals and more than 600 brigadiers, more than many national armies, while there are far too few boots on the ground and visible policing is sorely lacking. Their functions are not always clear, yet they earn more than R1 billion a year in total, money that could have been better spent on actual policing or employing more ordinary police officers on the ground.

Many well-intended action plans to combat specific crimes, such as the one for gender-based violence, family and child violence, femicide, vulnerable groups and sexual offences don’t succeed due to a lack of proper implementation at police station or regional level. There is plenty of sound policing on paper, but very little by way of implementation and action.

Due to the government’s over-emphasis on fighting corruption on its own, the National Prosecuting Authority (NPA) was rid of the remnants of state capture and re-empowered, but government has failed to adequately fund this exercise resulting in a shortage of skilled and capable investigators and prosecutors, which in turn is causing cases to be prosecuted selectively with many never prosecuted. There are many other problems and bottlenecks in the overall criminal justice system. With the over-emphasis on corruption, many other areas of battle against various criminal activities are being neglected.

When Eskom’s problems became too big for the two cabinet ministers tasked with dealing with its administrative, policy and legislative requirements, a dedicated new ministry of electricity was created to deal specifically with loadshedding. Combating crime also falls under two ministers – police and justice. But these two are arguably more focused on and geared for the administrative management of the SAPS and of the NPA and judiciary, than the issue of crime in itself.

What is sorely missing, is a ministry and department dealing specifically and holistically with crime and that has the political will to devise and implement a national crime-fighting plan that deals holistically with crime in its totality in South Africa before crime turns South Africa into a wasteland or failed state. Meanwhile, time is running out to deal effectively with South Africa’s immense crime crisis.

Stef Terblanche is a Cape Town-based political analyst and journalist.