From a woman selling sweets at the roadside to major REITs, South African businesses are learning to book a new line item: extortion.
Those affected call it a criminal tax, imposed by organised syndicates and by “chancers” who’ve spotted the same gap. Some companies now build it into feasibility studies before a project even starts.
Bread costs more in the townships, building sites sit idle for months, municipal workers withdraw from some areas, hawkers close shop and contractors walk off projects because their workers fear for their lives.
The demand, repeated in different forms across the country: pay up, or pay the price. What was once opportunistic crime is becoming a parallel tax system, enforced through intimidation and violence and one authorities are struggling to contain.
The latest crime statistics, released by Acting Police Minister Firoz Cachalia on Friday, put numbers to the problem: 519 extortion cases in the first quarter of the 2026/27 financial year, 291 of them financial extortion. The figures sit alongside a broader decline in serious crime: murder down 5.9%, from 5,770 to 5,427 cases, and contact crime down 2.3%. But extortion tells a different story about where South Africa’s criminal economy is heading.
A tax on doing business
Extortion has moved well beyond construction sites. It now touches spaza shops, hawkers, taverns, restaurants, transport operators, municipal contractors and property owners, in townships and city centres alike.
“Our backs are open - we have no one to turn to,” says one manager working in a township area, who asked not to be named.
Developers and REITs we spoke to earlier described extortion and bribery as an accepted cost of doing business now. They shrug. It’s just how things work, they say.
For developers on tight margins, that shrug has a price: money meant for construction, wages and materials gets diverted into security and protection payments instead. And the damage doesn’t stop at the company being targeted - when a project stalls, workers lose wages, suppliers lose business, communities lose economic activity, and the government loses the infrastructure it paid for.
“The growth of the construction mafia is very concerning,” says Western Cape Property Development Forum chairperson Deon van Zyl, warning of the toll on construction staff, the economy and service delivery.
The so-called construction mafia remains the most visible face of the problem. Groups posing as “business forums” demand money, subcontracts or a cut of project value and meet refusal with intimidation, violence and disruption. More than 180 major infrastructure projects have reportedly been disrupted, halted or delayed this way, with the value of affected projects put at roughly R63 billion.
Widespread
What starts as R150 a week from a small trader doesn’t stay small. Multiply it across the economy and those payments become an operating cost. These are absorbed by traders, landlords, developers, and ultimately the people who buy their goods, rent their homes, or wait on the projects being built.
“Imagine you have a small table: 10 apples, 10 bananas, 10 sweets,” says the township manager. “Whether you sell it or not, you have to pay this person threatening you.”
A trader might be asked for R150 a week, then face two or three more groups demanding the same. “That’s R600 a week just to be able to do business.”
Some simply stop. “In the end the woman doesn’t even do that anymore. She stays at home. She doesn’t want to work for the criminals. She was just trying to put some food on her table, and even her, they target."
The manager says the problem grew because people who weren’t directly affected stayed quiet. “We never nipped it in the bud… now it is bigger than us. It is each man to himself. Even in the communities, you don’t know who to trust.” They also allege some syndicates are run from inside prisons.
Micro-developers, increasingly central to affordable housing delivery, build “with a cloud over their heads,” the manager says. “A month after you finish building, they’ll be there for their cut… A builder-landlord thinks: what happens if I build here, who will defend me? They don’t have faces, they send their soldiers in. But people soldier on and still build.”
Extortionists typically open with a message or a meeting request; the sum depends on who’s asking. “The minute you give in to one - and you have to, or face problems - you’ll find two or three others knocking. And they threaten your safety and your tenants’ safety.”
Developers also face demands to hire specific people or use specific suppliers; refusal can mean damaged equipment or workers forced off site.
One micro-developer, also speaking anonymously, says extortion has gutted a business meant to be their way out of poverty. “I built extra flats on my land and was renting them out. One of my tenants is a young nurse. I made the place nice. But then the guys threaten your life. They want a big portion of what you get just so your tenants stay safe, and you don’t get killed.”
Under pressure
The Global Initiative Against Transnational Organized Crime (GI-TOC) has mapped four major extortion economies operating in Cape Town: the CBD night-time economy, construction, transport and township enterprises. The last of these hitting formal and informal businesses hardest in Khayelitsha, Gugulethu and Nyanga, along with municipal workers and contractors. The result: criminal groups increasingly decide who trades, where, and at what price.
Cape Town
Cape Town has posted four consecutive quarters of falling serious crime, with murder down in all six areas where the City’s LEAP officers work alongside SAPS. Mayoral Committee Member for Safety and Security JP Smith says the numbers show resourcing and hotspot policing can work but extortion remains the exception.
“Much was made of the seriously worrying extortion statistics for the Western Cape,” Smith said, adding that the City’s offer to help SAPS dismantle extortion syndicates, as it previously did with kidnapping syndicates, has gone unanswered.
“It must be said that our offers to SAPS to assist them… have not been accepted.” Smith says this strengthens the case for greater local policing and investigative powers. For businesses facing threats now, the interagency standoff matters less than whether help arrives at all.
When crime becomes an economy
The same model plays out across transport, township trade and the night-time economy: control an activity, create fear, demand payment, punish refusal. GI-TOC’s research shows these markets overlap and interlink: the construction mafia in infrastructure, transport extortion on taxi routes, township extortion on small business, CBD syndicates expanding beyond nightlife into other trade. These are different sectors but with the same model. That’s what separates extortion from an ordinary crime wave as it doesn’t just take money, it takes control of communities’ economic life.
The police response
Acting National Police Commissioner Lieutenant-General Puleng Dimpane says SAPS has intensified its operational response and is restructuring Crime Intelligence to sit at the centre of proactive policing, identifying threats and directing resources before crime happens. But she acknowledges progress in some categories doesn’t mean the wider problem is solved. Even where reported cases number in the hundreds, the economic and social fallout reaches thousands.
The Madlanga Commission
The picture darkens alongside the Madlanga Commission, set up after KwaZulu-Natal police commissioner Lieutenant-General Nhlanhla Mkhwanazi alleged criminality, corruption and political interference within parts of the criminal justice system. The commission has heard testimony implicating senior law-enforcement figures and alleged links to criminal networks and is raising a hard question: can organised crime be dismantled if criminal interests have already penetrated the institutions meant to fight it? The integrity of those institutions matters as much as their capacity.
The cost crime statistics can’t count
SAPS counts reported cases. It can’t count the businesses that pay quietly, abandon projects, or quietly change how they operate. It can’t count the businesses that never open because their owners already know the price of trying. The 519 reported cases are one measure of a much larger tax: collected one building site, one business, one life at a time.
“We have just learnt to work in the confines of this ‘new economy’,” says the township manager, who knew that being named would mean “tickets for me” … this a day after the latest stats showed crime, on paper, going down.
- All the names of those interviewed are known to The National. They asked not to be named for fear of retaliation.