The extortion economy in Cape Town has become entrenched and methods deployed in the city’s shadow economy are exported throughout SA, making it difficult to arrest the pervasive trend, a study by Geneva-based Global Initiative Against Transnational Organised Crime shows.
The international NGO, in a report titled “The shadow economy; uncovering Cape Town’s extortion networks”, said the city is host to a “menacing shadow economy” with money, services and goods being extorted from an increasingly wide range of businesses.
The report focused on CBD night-time extortion, transport, construction mafias and the township economy.
It found that while nightlife extortion was initially focused on nightclubs, it has expanded to include other businesses such as restaurants and coffee shops.
Regarding construction mafias, it said methods have been copied and adapted from KwaZulu-Natal, and similar extortion practices have spread to other parts of the country.
Global Initiative also found that extortion in the transport sector has expanded to include buses, private transport and even private vehicles, while extortion in the township economy is rife in the Cape Flats, including the townships of Khayelitsha, Gugulethu and Nyanga.
The organisation found that extortion methods developed in Cape Town were also exported throughout the country.
“The result is a criminal web in which actors learn from each other and move freely between operations. Another key risk posed by the Cape Town extortion economy is that it is becoming increasingly entrenched. The CBD night-time extortion economy, for example, has existed for more than two decades and has become normalised, with some actors now expanding into other sectors,” Global Initiative says.
Expanded range
“Moreover, township enterprise extortion, which began much more recently, has become pervasive and widely accepted in a relatively short period of time. International research indicates that once extortion economies become entrenched, they are extremely difficult to deal with. This is a major concern — not just for Cape Town but for the province and the country as a whole.”
The study found that after the relaxation of Covid-19 rules, syndicates in the Cape Town CBD expanded their range, targeting coffee shops, daytime restaurants and even hotels and luxury apartments for the first time.
Global Initiative also found that the rise of the construction mafia in the city has been accompanied by high levels of violence. By February 2023, there had been at least 10 murders linked to construction extortion, and eight people had been shot and wounded on construction sites.
“Cape Town gang leaders have also become involved in the construction mafia, leveraging their reputation and the criminal resources at their disposal to extort contractors involved in infrastructure projects.”
The organisation found that extortion in the township economy initially targeted foreign-owned businesses. After the gangs were emboldened by their success in extorting foreigners, the gangs of Khayelitsha, Nyanga, Philippi and Gugulethu turned their attention to local businesses and even residents to meet their “expanding needs”.
Township economy
Global Initiative identified two key gangs operating in the township extortion economy in Cape Town: Boko Haram and a breakaway gang, the Guptas.
It said these gangs operate in Khayelitsha, Nyanga and the surrounding areas. They are less structured than other gangs, and their leadership is often fluid and difficult to identify.
Global Initiative said the intersections and connections between the extortion economies in Cape Town take a variety of forms, and key actors or groups may operate across different economies.
“These overlaps, coupled with the fact that extortion economies are becoming increasingly entrenched and embedded in critical state institutions through corruption, make extortion more resilient and difficult to tackle,” Global Initiative said.
“However, not addressing these economies is not an option, and failure to do so will lead to their further entrenchment and pervasiveness. 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.”
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