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In November 2023 we reported on a new project by the Global Initiative Against Transnational Organized Crime (GI-TOC), which would monitor crime activity in the Western Cape (WC) province, which struggles with crime like many other areas in the country. The first issue of the Western Cape Gang Monitor, released in October, was based on research by the GI-TOC Observatory of Organized Crime in South Africa. It kicked off a series of bulletins which will be published quarterly, “to provide a concise synthesis of relevant trends to inform policymakers and civil society”.

A new GI-TOC report, released in April 2024 and titled The Shadow Economy: Uncovering Cape Town’s Extortion Networks, sheds more light on the particular practice of extortion in the WC, a growing threat that must urgently be addressed and stopped. The report, says the organisation, is intended to be the first in a series of reports on the spread of extortion economies throughout South Africa, to gain a better understanding of how and why this criminal activity is increasing, how it varies from province to province, and how to develop local and national strategies to fight it.

“Extortion is the practice of obtaining money, goods, or services through the use of actual or implied violence or force,” says report author Jenni Irish-Qhobosheane. While this is not defined as an offence in domestic legislation, she adds, a common law description has developed through case law and historical legal influences.

The Western Cape has been particularly hard hit by the extortion economy, partly because of its existing, and related, gang violence problem. The City of Cape Town, says Irish-Qhobosheane, is host to a “menacing shadow economy, with money, services, and goods being extorted from an increasingly wide range of businesses, including spaza shops, nightclubs, construction and transport companies, as well as individuals”.

Media reports do not paint the true picture, the report notes. “Extortion is growing rapidly and spreading throughout the city, and the groups involved are highly organised.”

What’s behind the rise in WC extortion activities?

Factors influencing the spike in extortion activity in the province have both local and national implications.

Cape Town’s history of gangsterism plays a significant role. Gangs have been involved in extortion for many years, and have become more sophisticated in their methods and creative in their sources of income. “In fact, many gangs that once saw extortion as a sideline now rely on it as a core part of their operations and income.”

The Covid-19 hard lockdown also played its part – by curtailing the activities of gangs and gangsters, it caused a loss in revenue. When the lockdown was lifted, extortion surged as criminals hustled to catch up on lost time. A 2021 GI-TOC report titled Lifting the veil on extortion in Cape Town, states that the drop in earnings caused by the lockdown contributed to extortion gangs ‘becoming more aggressive and ruthless in their approaches than they would normally have been once the restrictions [had been] partially relaxed’.

In addition, the initial success of extortion practices emboldened criminals and led to expansion into more types of businesses and forms of transport, particularly in areas where there is a weak law enforcement presence. “This is the case in the gang-afflicted areas of Cape Town, where businesses and residents may see protection payments as necessary or as something they cannot challenge. People in these areas may comply with extortion demands because they believe the state is unable to protect them, or because they believe gangs can provide better protection.”

The South African Police Service (SAPS) and other law enforcement agencies have not been efficient, effective, or coordinated in their response to the growing threat. The existence of various task forces and the promise of a special steering committee, announced in September 2020 by Police Minister Bheki Cele but still non-operational nearly four years later, add to the problem. In addition, corruption in the police force at all levels undermines these efforts and erodes the public’s confidence to work with the law.

Often all it takes is a tendency towards violence, intimidation, and an implied threat to successfully extort a victim. The risks and outlay involved in the extortion business are low, says Adv Mervyn Menigo of the National Prosecuting Authority. He was speaking in February 2024 to the Business Against Crime South Africa conference. On the other hand, the rewards can be as lucrative as other forms of crime. “You threaten somebody and get money. Kill one person and you’ve got the whole community in your pocket.”

Types of extortion

The report identifies and discusses four main extortion economies in the province:

  • The central business district night-time extortion economy, which initially focused on the city’s night-time economy but has expanded to include other businesses, such as restaurants and coffee shops.
  • Cape Town’s construction mafia, which targets infrastructure projects and the construction sector. Methods have been copied and adapted from KwaZulu-Natal, and similar extortion practices have spread to other parts of the country.
  • The transport extortion economy, a long-standing problem within the city’s minibus taxi industry, but which has expanded in an unprecedented way to include buses, private transport, and even private vehicles.
  • The township enterprise extortion economy, which focuses on formal and informal businesses and individuals operating particularly in the Cape Flats, including the townships of Khayelitsha, Gugulethu, and Nyanga. It also targets municipal workers and contractors.

These four extortion economies are distinct but interlinked, the report notes, and criminal actors are present or have connections in more than one.

Such connections enable those involved to hone their skills and refine their methods. “Lessons are also learnt from extortion practices in other parts of the country, as in the case of the Cape Town construction mafia. Methods developed in the Cape are also exported throughout South Africa as individuals move between provinces. The result is a criminal web of extortion, in which actors learn from each other and move freely between operations.”

The way forward

Without intervention, the WC’s extortion economy will continue to fuel violence and fear, damage the formal and informal economy, disrupt critical development projects, interfere with basic service delivery, undermine the rule of law, and further erode trust in the government.

Eventually, says Irish-Qhobosheane, a parallel system of criminal governance will emerge and entrench itself.

The challenges posed by connections in more than one extortion market and the presence of criminals in critical state institutions poses a challenge, but they must be tackled.

“As Cape Town gangs have played the primary role in the emergence and development of extortion, any approach to dealing with these economies must also address the city’s gang problem and its associated reservoirs of violence.”

The report makes several recommendations:

  • Monitor, trace, and understand interconnections to assist with developing a more evidence-based approach to the problem and enable more efficient monitoring.
  • Recognise and tackle embeddedness, which not only requires disrupting the ties that link criminal entities with their environment, but also addressing the surrounding contexts. Recent high-profile arrests are a positive sign, but they must be accompanied by approaches that challenge the environment that has enabled extortion to thrive and expand, otherwise the impact will be limited and short-term.
  • Early warning systems will make it easier to deal with extortion economies as they emerge. In Cape Town, the rapid expansion of extortion has caught authorities off guard – so there is a need for a coordinated early warning system that can identify emergent extortion economies and the expansion of existing ones.
  • Policing responses must be better coordinated and structured. “As it stands, the police’s response is fragmented. In Cape Town and nationally, both the Directorate for Priority Crime Investigation and the SAPS organised crime unit deal with organised crime, and there are tensions between the two.”
  • The Anti-Gang Unit and the recently formed extortion task team under the SAPS Organised Crime unit add a further complication and increase the uncoordinated manner of addressing extortion. “There is an imperative need for the police to address this disconnected approach, as it impairs its ability to make sense of and address extortion economies.”
  • Improve coordination and co-operation between different tiers of government, so that various divisions and units are not operating in silos but rather work in concert to implement coordinated strategies and approaches.
  • Report extortion, through the various channels available. The 24-hour extortion hotline set up by the City of Cape Town has not had the expected results, the report notes, and people seem hesitant to make use of it. The whistle-blower culture in South Africa is one of fear and distrust, and city management may need to embark on an awareness- and trust-building campaign, emphasising the importance of crime reporting, even if it is done anonymously.
  • Build community resilience, so that extortion in the city does not become any more normalised than it already is. “Successful campaigns against extortion in other countries have been most effective when they have focused on combating not only the different groups involved, but also the complicity of companies and communities.”

While South Africa’s domestic response will need to be tailored to the country’s specific practices and problems, it will also be valuable to undertake a comparative survey of successful international strategies.