South Africa risks becoming a mafia state: CEO
Organised crime is fast emerging as the biggest threat to South Africa’s economy, says Busi Mavuso, the CEO of Business Leadership South Africa (BLSA).
Mavuso said that crime syndicates, which have already captured large industries across various sectors, are now more damaging than bad policy or service delivery failures.
“We are in the grip of an epidemic with large industries from mining to construction being targeted by extortion rackets. This is undermining all of our efforts to build a country with a growing economy based on good policy and an effective state,” she said.
According to Mavuso, in light of these extortion efforts, the main issue is that while businesses can pay for security and can share knowledge on syndicates, they cannot compile dockets and prosecute.
“Fundamentally, no one can protect our security other than the state, and its capacity to do so is vastly weaker than it needs to be.”
Turning the police force into an effective one needs to be an urgent national priority, she said.
“If we fail, we seriously risk descending into a mafia state with the formal sector squeezed out by criminals whose reach stretches deeply into our law enforcement structures,” said Mavuso.
“This needs to become the new number one priority for organised business.”
The destruction of institutions within the criminal justice system during state capture is the single biggest foundation of the spread of organised crime, she said.
“The focus to date has been on resuscitating the National Prosecuting Authority. This was important work, and it has made progress – the fact that there are now 29 cases in the courts related to state capture, ranging from the former leadership of Transnet and Eskom to the Guptas, is a good indicator that change is happening.”
Mauvso said that the elite crime-fighting group, the Hawks, have, however, fallen victim to state capture with no skilled workers – the organisation has more vacancies than filled posts.
She added that recruiting top-quality investigators who can turn the tide against organised crime is difficult, but this is an area where businesses can contribute skills and support renewal.
Criminal elements within industries and companies, the key to the economy, are crippling the country. State-owned entities are currently taking on the brunt of sabotaging efforts.
Transnet, for example, reported on 13 November that sabotage at the national freight and logistics company had cost South Africa R1 billion a day in light of 5,500 tonnes needing to be cleared from the railway.
The CEO of Transnet, Bonginikosi Mabaso, said that on 8 November, a train carrying export coal from Mpumalanga to Richards Bay was derailed near Ulundi, prompting the company to investigate.
“Transnet loses R55 million in revenue daily, just on the coal line. If you look at the multipliers, the mining industry and the impact on the economy, you are looking at R1 billion a day due to this derailment,” added Mabaso.
Eskom has also been a frequent target.
On 22 November, another truck driver delivering sub-grade coal destined for power stations – was caught. Two weeks prior to this incident, two drivers were arrested in possession of stolen coal.
Eskom said that coal theft is a highly organised criminal activity, and syndicates involved are being enriched through the proceeds derived from the trade in stolen coal, all while the company loses billions of rands due to the misappropriation of coal.
The power utility has also be subject to acts of sabotage from within its own ranks, leading to damage and shutdowns at power stations.
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