Economic crime rates on the decline in South Africa

Economic crime in South Africa appears to be steadily in decline, having equaled the last low point seen in 2011. PwC experts suggest that taking preventive action is an effective way to further drive down these numbers, which still remain high by global standards.

Where the number of organisations in South Africa that had experienced economic crime stood at a staggering 77% last year, these figures have dropped to 60% this year, a nine-year low for the country. The figures are promising, and reflect consolidated efforts to tackle corruption in South Africa.

Financial crime figures soared in recent years, with even the largest audit and accounting firms in the country coming up in the list of those involved. The likes of KPMG, McKinsey & Company, Bain & Company and Deloitte, among others, have all been implicated in instances of financial malpractice, representing the tip of the iceberg.

Since this spike, the government has been engaged in efforts to improve accountability, while the private sector has been doing its bit to minimise risks. These efforts have manifested in a much lower rate of economic crime, although the figures remain remarkably high by global standards.

The global average stands at 47%, compared with 60% for South Africa, while the rate of crimes in excess of $100 million is at 4%. PwC Forensic Partner and Global Economic Crime Survey Leader for South Africa Trevor White suggests that the rates are still high due to the financial climate in the country.

“Given the spate of recent scandals in South Africa, both in the public and private sectors, it is no surprise that organisations consider bribery and corruption to be the most serious economic crime to affect businesses. This, combined with increased involvement of senior management in perpetrating such acts, has resulted in a sharp increase in the value of losses incurred as a result,” said White.

For him, the way forward for businesses is to take measures before being hit or coming to be implicated in financial crime. “No business can claim to be immune to the scourge of economic crime and fraud. Rather than waiting for an incident to take place, businesses need to take a proactive stance and increase their levels of insight and awareness – including increasing awareness from a board oversight perspective as well,” he added.