Crime defeats employment

IT’S UP TO AUTHORITIES TO MAKE IT POSSIBLE FOR BUSINESS TO FLOURISH Were it not for high crime levels, close to one million people would have attempted to start a home business.

The South African enterprise world remains in a critical condition since the real causes undermining its wellbeing are not being addressed. One of the kindergarten tasks of any government is to ensure a safe environment for and protection of the rights of all people and legal entities in its jurisdictional area. This entails not just effective crime prevention, but also effective detective work and prosecution so that wrongdoers can be brought to justice.

Consider for a moment the underachievements of the ANC-led government under the Zuma administration in protecting the rights and property of businesses.

The outcome: SA ranks high as a haven for criminals to feed off business. It is only Guatemala, Honduras, Venezuela and El Salvador that SA has to overtake to become the undisputed champion as having the highest cost of crime for business.

An overstatement? Only the views of the large disgruntled corporates?

Combining data by the Enterprise Observatory SA (Eosa) on the number of enterprises per municipality, with statistics from the Institute for Security Studies, expresses five specific crimes against businesses as the number of crimes per 100 enterprises in a municipal area.

On this basis, one can compare small and large municipalities.

In Tokologo in western Free State, there were 262 crimes with businesses as victims per 100 enterprises in the municipal area; on average 2.6 crimes per business per year. No wonder the local private sector has already disinvested from the municipal area – the value of nonfarm commercial and industrial properties form less than 1% of the value in its municipal valuation roll.

At this level, it is small- and medium-sized firms that can no longer compete due to rampant crime. But crime also has a massive impact at micro firm level in the informal economy.

A 2011 study found that crime was the primary deterrent preventing people from entry into the informal sector.

Based on Stats SA’s Victims of Crime reports for 2010 and 2015, the percentage of persons refraining from establishing a home business out of fear of crime had increased from 8.2% to 11.8%. Consider the 6.214 million unemployed South Africans, and add the 2.277 million South Africans who were so discouraged that they stopped looking for employment: a total of 8 491 000. Were it not for high crime levels, close to one million people would have attempted to start a home business.

Mix into this damning statistical evidence the following headline-grabbers, and the investment roadshow by President Cyril Ramaphosa’s four ambassadors looks like an attempt to wallpaper the cracks: Truck looting at Mooi River Toll Plaza; The blackmailing of construction companies by local business forums insisting on 30% of the work in subcontracts;

The destruction of an H&M store by an EFF-inspired mob; and

The dramatic rise in blatant attacks on cash-in-transit vehicles.

Johannes Wessels is director of Eosa. This is a condensed version of an article that first appeared on Eosa