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Organised crime syndicates are bleeding South Africa’s national economy of R155 billion a year – and that number is “significantly understated”. That is according to Democratic Alliance (DA) Shadow Minister of Finance, Dr Dion George. He gives this breakdown: Construction mafia – R17 billion; Infrastructure vandalism and arson – R47 billion; ESKOM’s organised crime networks R12 billion; Kidnapping and extortion syndicates – R146 million; Illicit economy, specifically drugs and guns – R13.6 billion; Wildlife syndicates – R1.2 billion; Illegal mining networks (Zama Zamas) – R14 billion; Tender corruption – R30 billion; and the Tobacco and cigarettes Mafia – R20 billion.” He calls on Government to make organised crime a priority – and to stop wasting resources on “never-ending bailouts to basically bankrupt entities”. Dr George says South Africa is only on its knees because the government has chosen the wrong economic policies. – Chris Steyn
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Relevant timestamps from the interview
- 00:09 – Introductions
- 00:33 – Dr Dion George on his calculations and estimates
- 03:11 – Breakdown of how much the different syndicates are estimated to be leaching from the economy
- 09:13 – Why have organised criminal operations not been designated as national priority crimes
- 18:16 – Conclusions
Highlights from the Interview
Organised crime syndicates are bleeding South Africa’s national economy of R155 billion a year – and that is “significantly understated”.
That is according to Democratic Alliance (DA) Shadow Minister of Finance Dr Dion George who has used data from think tank organisations and public statements by government officials to do a conservative estimate of the damage.
He speaks to BizNews following the release of the 2023 Global Organised Crime Index (GOCI) which shows 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.
Giving a breakdown of how much some syndicates could be leaching from the economy, Dr George says: “Well, we’ve estimated that the construction mafia is at 17 billion, infrastructure vandalism and arson at 47 billion, ESKOM’s organised crime networks 12 billion, kidnapping and extortion, that’s less than a billion, that’s 146 million. Taxi mafia, we haven’t got to a number yet, but we are working on that. The illicit economy, specifically in drugs and guns, 13.6 billion, wildlife syndicates 1.2 billion, illegal mining networks, that’s the Zama Zamas, that’s about 14 billion, and then tender corruption we’ve put at 30 billion, and then the tobacco and cigarette mafia at 20 billion, and the total is 155 billion.
“…at that price, per year, it’s really depriving us of a lot of revenue, for example, tax revenue that also could be collected because we know there’s a massive shortfall….
“So if you look at things like this that are basically sucking energy out of our economy, we could in fact plug that hole if we had a better outcome on these things.”
Dr George points out that the estimates cover “only things that we actually have been able to measure”.
“So that is why I think the number is fairly low. It’s probably a lot higher if you take into consideration, for example, the fraud and the corruption that’s happening in, for example, the documentation in home affairs and all the illegal documents operating in our economy.”
He says the government has a lot to account for because it is not doing its job in managing this massive problem because the government itself is a “corrupt entity”.
“And that’s where the big problem actually lies. There’s no political will to sort this out.”
He points out that fixing the problem would require a lot of effort because “you’re not dealing with one small little isolated incident; you’re looking at systemic corruption”.
“So we have a very significant problem, but it is not something that cannot be fixed. It can in fact be fixed if we have the political will to do that and we have the right people fighting this problem.”
He calls on the Government to make organised crime a priority. “Put resources on it instead of wasting it on never ending bailouts to basically bankrupt entities and do something positive that will start turning the tide because it is possible. Because we should not be in the league of countries like Myanmar and Colombia, Mexico is there, Nigeria, the DRC. These are countries that are similar to us in terms of the levels of corruption. And that’s not what we want for South Africa. Certainly not for a country that is actually a very rich country. And we are only on our knees because our government has chosen the wrong economic policies.”
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