APA-Johannesburg (South Africa) Crime is costing the South African economy at least 10 percent of its annual gross domestic product, a new World Bank report said on Thursday.
The report, titled Safety First: The Economic Cost of Crime in South Africa, said crime is severely constraining the economic prospects for Africa’s most industrialised country.
“Crime costs the economy at least 10 percent of Gross Domestic Product (GDP) annually in terms of stolen property; protection costs – encompassing security and insurance; and missed economic opportunities,” the report said.
The report, which is part of the World Bank’s South Africa Economic Update, investigated the economic impact of high crime rates on households, businesses and the public sector, focusing on economically motivated crimes.
The research was intended to support the South African government in the design and implementation of policies to combat and mitigate the costs of crime on the economy and society.
This aligns with the government’s objectives to initiate reforms aimed at enhancing the fight against crime, as outlined by President Cyril Ramaphosa in the 2023 State of the Nation Address in February.
“With this new edition of the economic update, the World Bank aims to contribute to the policy debate and support the government’s action to reduce the incidence of crime, by quantifying its economic impact,” said Marie Francoise Marie-Nelly, World Bank country director for South Africa, Eswatini, Botswana, Lesotho and Namibia.
She noted that the research findings came “at a time when South Africa needed to address structural constraints that have locked the economy in a low growth-low employment trajectory.”
The prevalence of crime in South Africa remains a pressing concern, particularly due to high rates of violent offenses.
With a consistent ranking among the top five countries globally for homicide rates, addressing this issue is crucial, Marie-Nelly said.
Another challenge is the increasing cases of organized crime, including theft of key infrastructure networks.
Real GDP growth has been trending downward since the global financial crisis (2008–09) and GDP per capita has, on average, contracted since 2015.
Noting that addressing crime in South Africa is a complex issue, the study underscored the need for multi-faceted actions, including targeted, well-designed policies for effective crime reduction over the short- and medium-term.
Such policies and measures include law enforcement measures, regulatory reforms and targeted violence prevention interventions.
JN/APA