One of the fastest growing crimes in South Africa is worse than you think

At an increase of nearly 20%, white-collar crimes are rising rapidly in South Africa – however, the real number is even higher. 

Recently, the police released their second-quarter crime statistics for July to September, which revealed that commercial crime in the country surged by 18.5%. 

This represents an increase from 30,630 incidents in the same period in 2023 to 36,300 in 2024 – the highest increase this year. 

In comparison, murder, sexual offences and robberies all saw a decrease during the quarter. 

Loxton Forensic CEO David Loxton explained on Newzroom Afrika that while this spike is high, this is only what has been reported – meaning that the real number is likely much higher.

Many of his clients at Loxton Forensics, for example, are simply not interested in reporting commercial crimes because they do not believe anything will be done. 

Although other factors, like the potential reputational damage a company could incur in a public trial, also contribute to the under-reporting of commercial crimes, this remains the biggest cause.

“My sense is that the reputational damage is a factor, but it’s really the despair and the sense that simply nothing will happen,” he said.

“And what a waste of time and resources to gather the evidence, present it to the police, and then it goes nowhere. That is the overriding factor at the moment.”

“So, I think generally, it’s probably a lot higher than 18.5%.”

He added that the increase in commercial crime is simply a symptom of a broader increase in lawlessness in South Africa. 

South Africa is a very lawless society, and that spans from minor crimes like small traffic violations up to high-profile white-collar crime matters, “and I think there is an increase across the board in lawlessness and white-collar crime”.  

Commercial Crimes Q2 2020 to 2024

Loxton explained that another reason for this spike is South Africa’s skills crisis, which is getting worse every year.

In particular, the country is suffering from a detective shortage, as underpaid and overworked detectives choose to leave the SAPS for the private sector. 

“I think governments around the world under resource facilities that don’t suit their purpose,” he said. 

He added that, for years, South African resources that do not suit the ruling party, such as the NPA and the police service, have been under-resourced and underfunded. 

This translates to their employees not receiving market-related salaries and being driven out of public service.

While there has been some collaboration between the private and public sectors, especially for high-profile cases like the Steinhoff matter, this hasn’t gone over well. 

“There is certainly scope for that and I think a lot of us in the private sector who work in the space have been advocating this for some time, that the state needs to draw on resources within the private sector because of underinvestment.”

“But then one sees the populist politicians lambasting that and criticising the NPA for sourcing in the private sector.”

Some people have also raised concerns about the ethics of external auditors since it may be hard for an auditor to report on a company’s wrongdoing knowing they are responsible for their pay.

If the external auditor forms close relationships with the company after being there for a long time, it can also be more difficult to report any potential crimes.

For this reason, Loxton explained that some countries have advocated for compulsory rotation of auditors. 

However, the problem is that it takes years to gain institutional knowledge and really understand the client’s business, which also makes for better auditors. 

Mandatory rotations would naturally undermine an auditor’s ability to learn a business and conduct a proper audit. 

According to Loxton, a better solution would be to implement artificial intelligence into the audit process. 

At the moment, young auditors do a lot of the legwork without really understanding what is happening, while more experienced professionals simply do a cursory look and sign off on the work without delving too deeply into it. 

“That model needs to change, and I think that is where technology will assist greatly – where we can have the machines and the technology doing much more holistic audits than we are seeing now.”

Another major contributor to South Africa’s high crime levels, including white-collar crimes, is the treatment of whistle-blowers. 

“One of my major concerns is the total impunity we’ve seen with regard to gunning down whistle-blowers.”

Whistle-blowers find themselves in hostile environments, and not enough has been done to protect them, Loxton said. 

“We’ve had some high-profile murders of whistle-blowers, and we haven’t had a single arrest, and there’s been no one put behind bars.”

For this reason, many people question whether they should blow the whistle when they know it will put their own lives and the lives of the people closest to them in danger. 

“Unfortunately, statistics show all around the world that whistle-blowers are the most important cog in the wheel that’s turning in the fight against corruption,” he added.

“But what incentive is there if you might lose your life and there’s no consequences for the perpetrators?”

This article was published by Daily Investor. Read the original here.

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