How world sees us: SA at risk of becoming a mafia state

One of the three lead stories in The Economist today under the strap SA Confidential is headlined “South Africa is at risk of becoming a mafia state.” Its source is the extraordinary public inquiry led by retired judge Mbuyiseli Madlanga, which has exposed how organised crime has captured the criminal-justice system. The world’s most prestigious business publication points to SA’s position as 7th worst (of 193 countries) for organised crime; faces a booming illicit economy (12-15% of GDP); rampant extortion by "construction" and "water" mafias; and criminal infiltration of police and politics that have forced out the police minister and commissioner. At the centre of the web, it continues, is alleged mobster Vusimuzi "Cat" Matlala, accused of bribing officials. As vigilantism and private security surge, business leaders back prosecutors, but real change depends on institutional reform—and how President Ramaphosa acts on Madlanga's November recommendations..From The Economist, published under licence. The original article can be found on www.economist.com© 2025 The Economist Newspaper Limited. All rights reserved..From The Economist.At the start of the decade, if you asked the bosses of South Africa’s firms to name the biggest problem facing their country, most would have said electricity. Relentless blackouts were crushing the economy. But these days another subject is at the top of their worry list: organised crime.South Africa has long had an underworld. Now criminality threatens the overworld: the state and formal business. The threat has been dramatically documented in an inquiry led by Mbuyiseli Madlanga, a retired judge, that marks the end of its first year on September 17th. Its televised hearings have featured more skeletons than a Halloween party—and revealed how mafias have captured the criminal-justice system. Whether South Africa can stop the rot will be a defining test of its relatively young democracy.The Global Initiative against Transnational Organised Crime (GI-TOC) ranks South Africa seventh-worst of 193 countries for organised criminality, behind only Myanmar, Colombia, Mexico, Ecuador, Paraguay and Congo. Mark Shaw, the group’s boss, notes that the country’s record has worsened in each of his think-tank’s biennial reports since they began in 2019. The World Bank says that crime costs South Africa at least 10% of GDP a year in stolen property, high security and insurance costs, and “missed economic opportunities”. “Organised crime is now the most immediate threat to our democracy, our society and our economic development,” Cyril Ramaphosa, the president, told parliament in February.South Africa has for many years been a trafficking hub. Drugs, animals, rare plants and people are smuggled with ease. Financial and cyber crime are rampant, too. But three worrying trends are relatively new: the growth of the illicit economy, the rise of extortion mafias, and the capture of policing and politics by criminal elements.Edward Kieswetter, who until April led South Africa’s tax authority, reckons that the size of illicit business has grown from 5% of GDP two decades ago to 12-15% of GDP this year—at least as large as the legal manufacturing industry. Legitimate firms are under pressure. Roughly 70% of cigarettes and 20% of alcohol are sold illegally. Illicit mining alone accounted for at least 60bn rand ($3.3bn or 0.8% of GDP) in lost formal output in 2024. Scores of “wash stations” mix contaminated petrol. Mr Kieswetter estimates that illicit firms cost the state up to 300bn rand annually in uncollected taxes, enough to fund the health budget.The second growing threat is extortion. Around a decade ago a “construction mafia” emerged in the province of KwaZulu-Natal (KZN). Members threatened to sabotage infrastructure projects unless they received a cut of the contract. These groups have since spread across the country. Cape Town’s government has a dedicated “war room” to organise protection for more than 50 projects. The criminals are “crafty”, notes Geordin Hill-Lewis, the mayor; mafia members try to infiltrate security firms hired to protect the building sites they lust after.Cases of kidnapping for ransom have more than tripled over the past decade. Businesspeople are hiring more security as a result. Intercape, a bus firm, has recorded more than 220 violent incidents against its fleet since 2020, carried out by criminals linked to the notorious “taxi” industry, providers of minibuses that resent formal competition. Johann Ferreira, Intercape’s boss, has said he rejected demands for millions of rands in “compensation” from these firms, claiming that what used to be a low-level war with the taxi industry had escalated into full-scale attacks.The poorest suffer most. Some gangsters demand protection money from teachers. “Water mafia” groups sabotage municipal pipes and bribe or muscle their way into contracts for water tankers. Then they charge poor residents by the bucket. Cape Town, which is trying to fight back, has deployed 200 law-enforcement officers to protect staff who deliver public services in the gang-ridden outskirts.As organised crime has metastasised it has infected the state—the third and most worrying trend. The Madlanga commission was established after Nhlanhla Mkhwanazi, the most senior officer in KZN, made explosive allegations about collusion among police, politicians and mobsters. So far its work has led to the departure of South Africa’s police minister, the police commissioner (the country’s most senior officer), his deputy, the head of the police’s organised crime unit and the lawyer leading an anti-corruption division within the National Prosecuting Authority (NPA). At the centre of events is Vusimuzi “Cat” Matlala, an alleged mobster who is on trial for attempted murder. Hearings have accused him of buying off officers with cash and gifts including a score of impala and doses of Ozempic, a weight-loss drug.The commission might be looking only at the tip of the iceberg. The growing economic power and political influence of organised crime mean that criminologists increasingly compare South Africa to the most mobster-ridden countries in Latin America. Firoz Cachalia, the acting police minister, says the government has identified 162 crime syndicates since 2024. Many are involved in several different criminal markets; some have links to international networks.They buy from a marketplace for hitmen. There were around 2,500 incidents involving contract killings or attempted murders from 2000 to 2025, according to GI-TOC. So far this year there have been close to 30 political assassinations. The telling names of two recent books by brave local journalists are “The Shadow State” and “Mafia Land”.What can the country do? As the state recedes, South Africans are taking matters into their own hands. In poor areas vigilantism is on the rise. In richer parts, private-security firms proliferate. In the late 1990s there was one private-security worker for every police officer; today the ratio is four to one.Inspired by a partnership between business and government that helped tackle power cuts and logistics problems, large firms are supporting investigators and prosecutors tackling complex cases by providing training and technology (in, say, telecommunications and banking). The goal is to ensure that kingpins see the inside of prison cells. “Accountability is the best form of organised crime prevention,” argues Anton du Plessis, a former deputy head of the NPA who leads Business Against Crime South Africa (BACSA). Yet there are limits to what can be done without institutional reform. “You cannot privatise the rule of law,” notes Mr du Plessis.The Madlanga Commission provides a once-in-a-generation chance to clean up the criminal-justice system. It is the closest thing South Africa has seen to investigations in other countries that successfully dislodged organised criminals, such as those by Italy in the 1990s. In November Mr Madlanga is due to report to Mr Ramaphosa with his proposed reforms..Read more:.Ramaphosa notes Madlanga Commission's second interim report as Sibiya faces criminal referral.How the president acts will help define his legacy. His party, the African National Congress (ANC), is implicated in the criminality. “When you have a corrupt government you have organised crime feeding off of it,” notes Neal Froneman, a mining boss and chair of BACSA. The president has moved slowly in undoing the institutional damage wrought by his predecessor, Jacob Zuma. Mr Ramaphosa implies he wants to be remembered as saving South Africa from the “state capture” era. But he is running out of time. His successor as ANC leader will be elected next year..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

How world sees us: SA at risk of becoming a mafia state

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