World Bank: Crime costs SA 10% of GDP annually

Dear Editor

In its Safety First: The Economic Cost of Crime in South Africa report released yesterday, the World Bank highlighted the staggering cost of crime under the ANC government. Annually, crime costs amount up to 10% of South Africa’s GDP.

For 2023, this cost is conservatively estimated at R700 billion, nearly three times the amount government spends on healthcare and R600 million more than the entire Police budget itself. The breakdown of these costs includes 2.6% of GDP from theft, 4.2% from protection costs like security and insurance, 1.8% from opportunity costs such as reduced tourism and increased transportation expenses, and 1% from foregone developmental public spending due to excessive government expenditure on crime prevention.

The report’s findings align with the 2023 Global Organised Crime Index (GOCI) which ranked South Africa 7th in the world, and 3rd in Africa, for the prevalence of mafia-style criminal networks and organised crime syndicates who have robbed us of the vital resources necessary for progress.

When taken into context, the numbers by the World Bank become even more alarming. These criminal activities could have cost us up to R175 billion in additional revenue for this year alone. This loss has destroyed National Treasury’s ability to achieve a primary surplus, manage public debt more effectively, and fund critical public services that ensure the safety and well-being of all South Africans.

But instead, under the ANC, the systematic degradation and hollowing out of South Africa’s law enforcement agencies has transformed the country into a haven for organised crime syndicates, who are threatening to overrun every sector of the economy.

The ANC’s solution to the address our fiscal woes has been to consider implementing more taxes . As if bleeding South Africans dry will somehow staunch the flow of illicit activities. What South Africa needs are not more tax hikes but a government with the backbone to eradicate crime.

Moreover, the report states that if wasteful security expenditures could be redirected, South Africa’s growth potential might have been between 0.7 to 1.3% higher between 2015 and 2019. Untold damage has been done by this Government.

And despite spending 2.7% of GDP (almost 10% of non-interest government expenditure) on policing, the judiciary and correctional services – much higher than the Organisation for Economic Co-operation and Development (OECD) average – Government has been unable to increase the effectiveness of this expenditure.

Unfortunately, the ANC, in particular its Minister of Police, the Sheriff of Incompetence, Bheki Cele, shows little urgency in addressing the crisis. And it has become clear, ridding South Africa of crime has now become synonymous with dismantling the ANC itself – such is the depth of the party’s corruption.

The ANC’s tenure has been catastrophic and has caused irreparable damage to our economy and international standing. Only a DA government has the resolve to save our nation from this crisis. It’s high time for South Africans to abandon the party that has clearly abandoned them.

Regards

Dr Dion George MP
DA Shadow Minister of Finance