JOHANNESBURG - Crime costs South Africa’s economy the equivalent of about 10% of its GDP each year, according to a new World Bank report titled Safety First: The Economic Cost of Crime in South Africa.
The report admits this is a “conservative estimate".
This assessment dovetails with other estimates, but it is backed by the expertise and research capabilities of the World Bank, which frames the issue as a burdensome additional tax on SA’s slow-growth economy.
By global standards, crime in SA — similar to unemployment and inequality — is off the charts.
If just some of the capital allocated to security by business could be put to more productive use, the GDP growth rate would more than double. Crime takes its greatest toll on small and medium-sized businesses, the report notes, because they cannot absorb the costs.
Crime also undermines the public sector — a case of state failure corroding the state’s capacity to deal with the problem in a vicious cycle.
