South Africa faces issues with entrenched corruption and organized crime, both having a corrosive effect on governance and economic growth. Despite progress under Nelson Mandela, state capture and corruption under the Zuma Administration have precipitated an explosion in organized crime. Moreover, South Africa has become home to some of the most diversified crime syndicates in the world. These syndicates, who have connections to transnational criminal networks, traffic in people, fauna, guns, drugs, and minerals. They also traffic in copper and oil stolen – often with complicity – from South African SOEs. These groups extort businesses, leading to the cancellation of contracts, as well as employment and economic losses. The current Ramaphosa Administration has taken several genuine, however limited, steps in tackling corruption and crime.

KJ-1: It is highly likely that levels of organized criminal activity in South Africa will remain persistent, and will continue to have a detrimental impact on commerce over the next 12 months.

• The Global Initiative Against Transnational Organized Crime recently identified 15 thriving illicit markets in South Africa, 10 of which are expanding. (source)
• Crime syndicates employ illegal miners, known as Zama Zamas, to illegally extract resources. Illegal extraction costs the mining industry over 7 Billion rand (roughly $404 Million) annually. (source)(source)
• Residents burned down houses of suspected Zama Zamas in Kodigo after several incidents involving sexual violence and theft perpetrated by Zama Zamas in and around Johannesburg. (source)(source)
• Theft of copper and oil from utilities, water, public freight and rail, and telecommunications companies, often with complicity from members of the companies themselves, causes 187 Billion rand (just over $10 Billion) in economic losses a year, and has contributed to continuing, unprecedented blackouts. (source)(source)
• Economic hardship and government bans on alcohol and cigarettes during the pandemic pushed thousands into organized crime and created massive illicit markets. (source)
• South Africa ranks 19th globally in organized crime activity, recently surpassing Brazil, Guatemala, and Libya. (source).
• The government’s most recent inflation figure, at 7.5%, represents a 13 year-high. Youth unemployment remains pervasively high at 32.6%. (source)(source)
• 2022 rates of assassination and kidnapping are over 3x what they were in 2010, when Jacob Zuma took office. (source) 
• ‘Business forums’ run by crime syndicates continue to extort money from local and foreign businesses, heavily complicating prospects for foreign direct investment. (source)

KJ-2: It is highly likely that corruption within the South African Government will continue to contribute to organized crime over the next 12 months.

• The Zondo commission, a government inquiry into corruption in South Africa, found extensive levels of graft and state capture, penetrating SOEs, government ministries, and the national police (SAPS). The commission also found widespread corruption within the ruling ANC party. (source)
• A crime syndicate working within the country’s largest public utilities provider, Eskom, was siphoning 100 Million rand of oil monthly from its Tutuka power station. (source)(source)
• ‘Business forums’ that extort money from commercial projects are known to have ties to the more economically radical wing of the ruling ANC party. (source)
• President Ramaphosa recently publicly recognized the role of state capture in canceled flights, energy cuts, unpaid workers, and supply chain disruptions. (source)
• Despite recommendations from the Zondo commission, Ramaphosa has elected not to prosecute dozens of ANC officials, several of which currently serve in his cabinet, and has denied all ANC connections to organized crime; Ramaphosa requires the ANC’s backing to run for another term in office. (source)(source)(source)
• The SAPS has been implicated in extorting communities, selling arms to gangs, drug dealing, murder, and aiding illegal mining. (source)(source)

KJ-3: It is likely that current efforts to minimize corruption at the highest levels of government in South Africa will decrease levels of state capture over the next 12 months.

• Ramaphosa has replaced the leadership at the National Prosecuting Authority (NPA) and the Hawks, the elite police unit employed to go after organized crime. Since, the NPA has racked up over 4,000 prosecutions, including the arrest of several high profile public rail freight officials. (source)(source)
• In response to the Zondo commission’s findings, Ramaphosa created the Investigative Directorate (ID), an arm of the NPA tasked with tackling corruption. The ID has already begun pursuing 89 separate cases. (source)(source)
• Ramaphosa replaced the SAPS commissioner and has promised a rebuilding of the police force. (source)(source)
• Since the beginning of Ramaphosa’s term, there has been a drastic increase in drug seizures in KwaZulu-Natal and at the port of Durban. (source)

Intelligence Cut-Off Date: 16th of November 2022