South Africa has one of the highest crime rates in the world. Businesses within South Africa are vulnerable to encountering all types of crime including robbery and fraud. Due to the horrific scenario that South Africa is facing, many businesses fear to enter the country, thereby preventing international business from flourishing. The high crime rate in South Africa is due to income inequality and reduced barriers in crime since the new South African democracy formed in 1994.
Cost of Crime on Businesses
Direct losses and security costs that reduce profits and divert funds that could be invested in business infrastructure.
Loss of government aid to stimulate business growth. Government money is spent instead on law enforcement, crime prevention, and the administration of justice.
Crime erodes human capital by encouraging emigration of skilled workers.
Crime keeps workers out of the labor market by discouraging them from work during off-hours and from commuting.
Crime causes increase in health costs of employees directly due to injuries or stress. Crime also has psychological effects by reducing motivation and causing depression for business owners. After an incident, 41 percent of business owners reported depression and loss of motivation to work.
Crime discourages foreign investment and reduces tourism.
Crime causes failures of small businesses that cannot afford proper protection or insurance against losses.
Crime increases poverty in South Africa due to loss of jobs and investment.
Crime brings about unfair competition from stolen goods resold at a lower price.
Recent Crime Trends and Statistics
The following statistics reveal where South Africa stands today in their fight against crime.
32.5% of crime was reported as serious crime (serious crime is defined as any crime that involves physical contact and is aggressive in nature.)
11% of South Africa’s government spending is used to fight crime.
Over 50 people each day are murdered.
Robberies occurring at businesses jumped 47.2% during the 2007/2008 year.
Commercial crime rates have doubled since 2005.
An estimated 27 businesses are robbed a day.
73.9% of crimes at businesses during the 2007/2008 financial year occurred in Gauteng and KwaZulu-Natal, this is a slight increase from the previous year.
There was a shocking 110% increase in the number of reported fraud cases by companies in 2005. As a result, over $10 million has been lost.
South Africa has also seen an increase in banking scams over the last few years, the cause; logos and letterheads are being stolen.
Types of Crime Impacting Business Edit
There are three broad categories of crime that affect businesses in South Africa. These are burglary, armed robbery and financial crimes. Burglary accounted for over 40 percent of incidents incurred, followed by shoplifting at 23 percent and robbery incidents were at 19 percent, including cash-in-transit (CIT) robbery, bank robbery and carjacking.
Financial crimes targeting businesses include corruption, blackmail, money laundering, advance fee fraud, banking fraud, identity theft, and organized crime.
Business Crime Prevention Methods
Controls are being enforced to help decrease this terrible rate of crime South Africa sees on a daily basis. The South African government integrated a “Crime Stop” program that screens calls and is used for gathering knowledge of known crimes.
Business Against Crime(BAC) was founded in 1996 in order to make South Africa “safe and secure”. This program brings businesses and the government together in order to help prevent and fight local crime. There are seven provinces registered, all in support of making South Africa a safer place to do business. The BAC’s crime reduction programs include:
Support and funding for the National Crime Prevention Strategy (NCPS), which provides crime data analysis and research, police management training, and commercial court reform.
The National Vehicle Crime Project to improve vehicle identification by using microdot technology, reducing hijackings by 30 percent in 2005/06.
The Metal Theft Project to prevent the theft of copper for illegal resale that impacted the telephone, electrical and public transport systems.
The Tiisa Thuto Safer Schools Project was launched in 2006 to educate the South African youth as a crime prevention measure. The program encourages community involvement to teach parents, educators and students about crime prevention