Criminal mafias are taking over South Africa

South Africa has become a mafia state, with criminal syndicates taking over parts of the economy by leveraging their connections to government officials and politicians. 

This has the potential to crowd out the legitimate private sector, slowly crushing the local economy and accelerating its downward spiral. 

These mafias have significantly impacted the operation of various sectors of the economy, such as the construction industry, water supply, and public transport. 

The emergence of these mafias has been coupled with surging illicit trade in cigarettes and alcohol over the past decade, as law enforcement agencies suffer from a lack of capacity. 

This is feedback from former Goldman Sachs Sub-Saharan Africa CEO Colin Coleman, who outlined the country’s slide towards a mafia state and how it is impacting businesses. 

Coleman pointed to acting Police Minister Firoz Cachalia’s warning that if drastic action is not taken, South Africa could find itself in a similar situation to Colombia, which has seen parts of its country overrun by cartels and criminal syndicates. 

“I am not alone in warning of an acceleration of the merging of criminal and political elements in South Africa and a variety of mafia organisations have emerged in the country,” Coleman told Newzroom Afrika. 

“This emergence is on the back of unemployment, the lack of enforcement of the law in South Africa, and a breakdown in the rule of law.” 

The deterioration in the rule of law and a stagnant economy have combined to push many individuals towards finding other means to survive, rather than acquiring a formal job.

“This creates a fertile environment for the rise in organised crime and mafia-style organisations, which are spreading around the country,” Coleman said. 

He pointed to a long list of mafias operating in the country, including the construction mafia, the cash-in-transit mafia, the taxi mafia, the tanker mafia, and the cigarette mafia, among others. 

This has resulted in a spike in crimes associated with organised crime, such as kidnapping and targeted killings of whistleblowers or opponents. 

“All of these factors are producing a concern that unless we reverse the rot we are seeing and implement the rule of law and turn the corner on the economy, there is fertile ground for these mafias to grow,” Coleman said. 

“They are able to grow their operations around the country and accelerate their development to effectively crowd out private sector activity in South Africa.”

The collapse of the rule of law in South Africa

Coleman’s concerns about the collapse of the rule of law point to a fundamental issue in South Africa, which is the inability to hold people accountable for criminal activity. 

The deterioration in the rule of law also scares off potential investors, who want to know that their investments in the country are secure. 

Standard Bank chief economist Goolam Ballim explained to Daily Investor that the rule of law is crucial to a flourishing economy. 

Ballim admitted that pointing to the rule of law as the main reason for South Africa’s declining economic outcomes sounds academic, but it is rooted in reality. 

“By the rule of law, I am referring to the overall governance climate within a country that is vital to attract investment locally and abroad,” he said. 

Ballim’s data shows that around three-quarters of all investment and economic growth hinges on the rule of law and good governance. 

“I am making a bold statement here. I have said it before, and the data support me in saying that governance is about two-thirds to three-quarters of the economic growth of a country,” he said. 

“Continued improvement in the governance structure will be the bedrock of enhancing predictability, efficiencies, and increased private sector participation in the economy. So, if you want to say what the silver bullet is, I’d say it is the rule of law.”

The rule of law in South Africa has been significantly weakened by the State Capture era, which resulted in hundreds of billions of rands being looted from the government.

It also resulted in law enforcement agencies being gutted, with their decline in capacity resulting in the inability to investigate and prosecute criminals. 

Ballim explained that the rule of law is relatively easy to call for and say, but is extremely difficult to practically implement. 

In South Africa, this proves particularly difficult as many of those responsible for defending the rule of law may be working to undermine it. 

“It is easy to say and sometimes it has even been done, but sometimes the very politicians responsible for the rule of law are also the ones who seek to preserve their patronage networks and so forth,” Ballim said. 

“This has been a crime on society for a length of time, and it is one of the things that we should continue to talk about as policy advisors and as citizens.”