The 2016 edition of Global Economic Crime Survey released by Price Waterhouse Coopers (PWC) had revealed South Africa as the country with the worst economic crimes and decried the government’s nonchalant attitude towards addressing it.
According to PWC, both government and private sectors have been verified to have a higher frequency of economic crime compared to what is obtainable in their global peers with it’s top economic crimes ranging from asset misappropriation‚ procurement fraud‚ bribery and corruption‚ cyber crime and human resources fraud.
The company further stated that though the survey reported a decrease of about 1% in economic crimes since the global financial crisis of 2008-9, the decrease still remain alarming especially as economic crime is changing significantly and countries are not producing detection and control measures that will keep up with the space of change. “What’s more, the financial cost of each fraud is on the rise.” they said.
“While some regions reported lower rates of economic crime and the global trend was steady, Africa, Western Europe and the Middle East showed significant increases in our 2016 survey.”
The survey also revealed that 69% of PWC’s South African respondents indicated that diverse kinds of economic crimes has been experienced in the 24 months preceding the survey and this was not different from its 2014 survey report.
“When compared to the global statistic of 36%‚ we are faced with the stark reality that economic crime is at a pandemic level in South Africa.” The company said.
Top 10 Countries With Economic Crimes
The survey’s top ten countries reporting the most economic crime were:
- South Africa 69%
- France 68%
- Kenya 61%
- Zambia 61%
- Spain 55%
- United Kingdom 55%
- Australia 52%
- Russian Federation 48%
- Belgium 45%
- Netherlands 45%.
This was followed by Kenya (61%, up 17% over 2014) and Zambia (61%, up 35% over 2014) with Saudi Arabia’s economic crime rate doubling from 11% in 2014 to 24% in 2016.
However, while more than half of the global organisations surveyed (53%) reported having lost less than $100 000 to economic crime over the last 24 months‚ only 43% of South African organisations could make that claim, PWC reported.
“There is a fear that unless drastic action is taken to curtail the current economic crime trend‚ we may very well experience an upsurge toward the kind of levels that were experienced when our first Global Economic Crime Survey was carried out in South Africa more than a decade ago. South African respondents reported the highest percentage of economic crime in the world‚ with France coming in at a close second‚ followed by Kenya and Zambia. This does not make for good reading from the perspective of the African continent.”
About 19% of South African respondents experienced losses of between $100 000 and $1 million‚ one in four respondents indicated having suffered losses of more than $1 million‚ and 2% lost in excess of $100 million which is double the global average.
Worst still, the state police have not given any hope to the people by attempting to capture perpetrators of these crimes.
“It appears that South African organisations are squarely in the cross-hairs of economic predators and are being exposed to greater levels of high-loss incidents than their global and even their African counterparts.”
Employers in both the public and private sectors‚ institutions and citizens need to jointly take a tough stance that this type of fraud will be dealt with to the fullest extent of the law‚ with the perpetrators being charged‚ prosecuted and‚ if appropriate‚ even imprisoned.”
South African organisations were reported to be more than twice likely victims of fraud by vendors compared to the rest of the world. It also has an overwhelming 68% victims of human resources fraud through the submission of false qualifications and 41% being victims of Procurement fraud.
Cyber crime in the country was also said to have been on the high rate also – ranking as the second-most reported crime in this year’s Global Economic Crime Survey- taking fourth place from a South African perspective. At 32%‚ it was the same as the global average.