Agriculture, Economic Development and Tourism

Accurately quantifying the number of businesses in the Western Cape that have closed due to extortion, the construction mafia, or other forms of organised crime between 2019 and 2025, remains challenging. Many business owners are too intimidated to report such crimes, fearing retaliation from criminal syndicates.  Due to the nature of the crime, public records on the number of businesses which have closed down due to extortion are not available. This underreporting makes it difficult to assess the full extent of the problem. The South African Police Service (SAPS) recorded 1,476 extortion cases in the Western Cape between April 2019 and March 2024, leading to 683 arrests but only 36 convictions, reflecting the difficulty in securing successful prosecutions (Democratic Alliance, 2024). The Cape Chamber of Commerce and Industry (2024) further highlights that extortion has become a systematic and growing threat in Cape Town, particularly in hospitality, construction, and informal trade, with businesses forced to make protection payments or face violent consequences. A notable example is Beerhouse on Long in Cape Town, which closed in 2024 after sustained extortion attempts, with the owner ultimately fleeing before publicly revealing the threats he faced (Pather, 2024). 

The economic impacts of organised crime in the Western Cape are severe. The construction mafia alone has been linked to project disruptions exceeding R400 million in 2024, stalling infrastructure development and job creation (Democratic Alliance, 2024). Hotspots for extortion include the Cape Town CBD, where businesses in the hospitality sector are frequent targets, and townships such as Philippi and Nyanga, where gangs extract money from local enterprises (Davis, 2023). The widespread nature of these criminal activities erodes investor confidence, hinders economic growth, and forces many small business owners into financial ruin or relocation. Without comprehensive interventions to improve reporting mechanisms and protection for victims, the true scale of this issue will remain obscured, allowing organised crime to continue undermining livelihoods and the provincial economy. 

References 

• Cape Chamber of Commerce & Industry. (2024). The Shadow Economy: Uncovering Cape Town’s Extortion Networks. Retrieved from capechamber.co.za 
• Davis, R. (2023). Extortion wars shut down schools, businesses in Philippi. GroundUp. Retrieved from groundup.org.za 

• Democratic Alliance. (2024). Draft Interim Report on Extortion. Retrieved from press-admin.voteda.org 

• Global Initiative Against Transnational Organized Crime. (2023). The Shadow Economy: Uncovering Cape Town’s Extortion Networks. Retrieved from globalinitiative.net 

• Pather, R. (2024). Extortion rackets force Beerhouse to close its doors in Cape Town. Daily Maverick. Retrieved from dailymaverick.co.za