Blackmailers have South Africa’s economy under attack

Extortion in South Africa is not new. However, the past decade has seen a rapid increase in such practices that affect a wider range of sectors in the economy.

Extortion occurs when people are forced by force or the threat of force to do something, such as hand over money or goods or provide a service, against their will.

Research by the Global Initiative against Transnational Organised Crime (GI-TOC) has found that four distinct extortion economies have emerged in Cape Town.

In the central business district, two separate criminal enterprises, one allegedly linked to Mark Lifman and the other allegedly linked to Nafiz Modack, are linked to gangs operating on the Cape Flats. They are demanding that restaurants, bars and nightclubs pay protection fees and hire private security and bouncers linked to these criminal enterprises.

Over the past decade, South Africa has seen a rapid increase in extortion, affecting a wider range of sectors in the economy

In the construction extortion economy, gangs or gunmen posing as local business forums invade construction sites and demand a stake in the project. The transport extortion economy includes elements of the minibus taxi industry that demand money from other minibus taxi operators, bus companies, and even private vehicles. Finally, the township enterprise extortion economy includes gangs that force both formal and informal businesses, including informal traders, to pay them protection fees.

While these different economies are relatively distinct, they are also interconnected, with various actors intersecting between them. Many of those involved in these economies are also connected to other criminal activities, including the illegal arms trade, drug trafficking, and armed robbery.

Chart 1: Links between different extortion economies operating in Cape Town

The growth and entrenchment of organised gangs in different parts of the country has contributed significantly to the increase in extortion. In the Western Cape, older established gangs have always been involved in this crime. However, over the years they have honed their skills and practices and found new ways to grow their businesses, making this activity more central to their operations.

Extortion is also a learned practice. As new gangs emerge in different parts of the country, they learn from the other gangs and criminal enterprises involved, adapting methods and models to their circumstances. For many of these emerging gangs, extortion is not just a sideline, but a core function of their operations. In places like Khayelitsha in the Western Cape, many gangs make the majority of their income from it.

As with many international rackets, extortion in South Africa has been fuelled by initial successes, leading to expansion and copycat. Such practices in the township enterprise economies of Khayelitsha and Alexandra (Gauteng) are a clear example of this. Gangs and criminal enterprises initially targeted foreign companies and then, encouraged by their successes, expanded their practices to other local businesses.

Similarly, in the transport sector, extortion has spread from the taxi industry to other forms of transport, including bus and taxi services. In the construction sector, criminals learned from the activities of the construction mafia in KwaZulu-Natal and began to copy and adapt these extortion techniques, spreading the practice to almost all parts of the country.

Four distinct extortion economies have emerged in Cape Town: in the nightlife, transport, construction and township enterprise sectors.

Compared to other forms of crime, such as armed robbery, extortion can be considered relatively low risk. At a Business Against Crime conference in February 2024, Western Cape Deputy Director of Public Prosecutions, Advocate Mervyn Menigo, said: ‘Extortion is low risk, high reward. You threaten someone and get money. Kill one person and you have the whole community in your pocket.’

In some places in the Western Cape and in townships such as Alexandra in Gauteng, criminals involved in CIT robberies and hijackings have turned their attention to extortion. “They use the same tactics as in CIT robberies, except the victim is unarmed and they can’t shoot back,” says Menigo.

Internationally, these practices flourish and expand in settings where the state presence is weak or absent, or where the state does not have the trust of the community. This is the case in South Africa, where businesses and residents in certain areas may view protection payments as either necessary or unchallengeable. People in these areas often comply with extortion demands because they believe that the state cannot protect them, or that groups involved in it can provide better protection.

The ability and willingness to use violence is an essential component of extortion in South Africa. The victim must believe that failure to comply will result in harm. Therefore, most extortion economies in the country involve various cycles of violence associated with different stages of the practice.

The ability and willingness to use violence is an essential element of extortion in South Africa

When extortion economies are first established, the levels and threats of violence are usually high to ensure compliance with demands. Once the group has consolidated its authority and the practice has taken root, the levels of violence may decrease, although the threat remains. If extortionists want to expand their territory or if their authority is threatened by rival groups, the level of violence will increase.

The high levels of violence associated with extortion economies, combined with the perception that the state cannot protect victims from this violence, has led to the entrenchment and normalization of many of these economies.

International research indicates that once these economies are entrenched and normalised, they become more difficult to tackle. This entrenching and normalisation, combined with the rapid expansion and links between criminal actors involved in the various economies, is what makes extortion in South Africa so dangerous.

To address this growing trend, it is crucial to understand how the different extortion economies are interconnected and intersect. We need to develop a more evidence-based approach to the problem that traces the connections between extortion economies and enables the disruption and destabilization of the power and capacity of those involved.

A more coordinated approach and strategy to tackle the problem must involve all levels of government, with different departments working together. The approach must also involve businesses and communities that are most affected.

Jenni Irish-Qhobosheane, Senior Expert, South African Observatory Global Initiative Against Transnational Organized Crime (GI-TOC)

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