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Organised crime and extortion could dampen Cape Town’s economy.

Experts have weighed in on the impact of organised crime on the economy of Cape Town. Picture: Supplied

Experts have weighed in on the impact of organised crime on the economy of Cape Town. Picture: Supplied

Published May 15, 2022

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Tracy-Lynn Ruiters

EXPERTS have warned that an increase in extortion and organised crime could stave off business investment and ultimately affect Cape Town’s economic growth.

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The experts said that investors would be more cautious because of the perception of crime in the city.

Last weekend six people were killed in Khayelitsha – the latest in a spate of mass killings over the past several weeks – believed to be linked to extortion.

The kidnapping of business men and women was also a concern. Earlier this year a 25-year-old Bangladeshi shopkeeper was kidnapped outside his shop in Kalksteenfontein. After 48 hours and a ransom of R100 000, the man was reunited with his family.

The man’s family said that they would return to their country, explaining that they lost more money than they invested for the month.

Peter Gastrow, the senior adviser of the Global Initiative Against Transnational Organised Crime, said although Cape Town has not been as hard hit by the “construction mafia” (people who stop construction in violent ways if their own people are not employed) as in other parts of the country, gang violence and extortion has had a negative impact on the growth of the economy.

Peter Gastrow believes that there is still a possibility to strengthen Cape Town’s economy amid the crime. Picture: Supplied

“There is no doubt that the increased incidents of extortion and racketeering have a dampening impact on investment in Cape Town.

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“The statistics also do not look good, because investors are aware of the gang violence and this would result in them backing out on investing,” he said.

However, Gastrow believed that it was still possible to turn the bear into a bull economy (from a receding to growing).

“This turn around requires political will power – on all levels, more effective policing, as well as more support from the private sector, and their willingness to work hand-in-hand,” he said.

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Western Cape MEC for Community Safety and Policing Oversight, Reagan Allen, pinned part of the reason for extortion on the failure to report these crimes.

“Complainants fear to make cases out of fear for their personal safety and the profitability of their business-role.

“There is also distrust of the SAPS, and a perception of corruption relating to the impotence in dealing with extortionists, actual involvement of state officials in extortion, lack of confidence in the civil justice system to speedily deal with civil disputes and a lack of solidarity between and within businesses for victims of extortion,” he said.

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MEC Reagen Allen said a task team has been set up to deal with extortion and racketeering. Picture: Armand Hough/African News Agency (ANA)

Allen said an extortion and racketeering task team had been deployed, along with other strategies, and the use of intelligence for targeted project investigations.

“These investigations are based on profiled organised crime syndicates/individuals and under cover operations. Furthermore, they focus on tax and other statutory and regulatory violations and the laundering of the proceeds of crime and following the money,” he said.

Professor Albert van Zyl, senior lecturer and head of the corruption and integrity studies unit at the North West University Business School, concurred with Allen.

“Crime as a whole, has an impact on economic growth. It is a perception creator, and investors make their decision based on that perception, so this means the more the crime; the less employment, which results in no economic growth,” he said.

Van Zyl described the growing rate of organised crime as a systematic problem that had become more complex over the years.

He believed that a holistic approach was needed to tackle it.

“You can’t simply put more policemen on the street, you need to have accountability, a culture of whistle-blowing. You need all the various spheres to work together,” he said.

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