Hijacking the economy - CNBC Africa

Hijacking the economy

Southern Africa

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Hijackings in South Africa stood at 9,990 for 2012/2013. PHOTOS: Shutterstock

“Private individual freedom is the single most important right and value in any free economy. If you take that freedom away from individuals, you affect the economy as well,” Dawie Roodt, chief executive officer of financial services company, Efficiency Group, told CNBC Africa.

HIJACKING IN SOUTH AFRICA

According to the Institute for Security Studies (ISS), hijackings in South Africa stood at 9,990 for the 2012/2013 financial year, indicating that the country has one of the highest hijacking statistics in the world.

(WATCH VIDEO: 69% of South African's have experienced economic crime)

While this figure may be a decrease from the record figure of 14,915 hijackings during 2009, media reports this year show that there has been a spike once again.

Two highly publicised reports during July 2014 were the cases of six-year-old Mongezi Phike, who was kidnapped during a hijacking and found a few days later, as well as the tragic story of four-year-old Taegrin Morris who was dragged to death from his mother’s hijacked car.

Dr Johan Burger, a senior analyst at the ISS, told CNBC Africa that South Africans may need to brace themselves for the release of the 2014 National Crime Statistics in September this year.

(WATCH VIDEO: SA's national crime statistics continues increasing)

“Unfortunately, we believe that the upward trend that we’ve seen over the last two years, will continue. From early statistics received from other sources, we see huge increases in some of our more serious crimes such as aggravated robbery,” said Burger.

While Gauteng is the most targeted province for hijacking, standing at around 5,000 during 2013, more than half of the country’s total, the Western Cape saw a 76 per cent spike in hijackings over the last two years, bringing its total to around 800. Kwa-Zulu Natal has the second highest number of hijackings in South Africa, around 2,500.

Burger added that a couple of hundred syndicates currently exist in the country, most of them international as well as a few home-grown.

“Some of the cars end up being taken apart and used for spare parts but a lot of them get moved across the border to markets waiting for them, mostly African markets. Many of our cars are seen in some of our neighbouring states. Of course there is a market overseas as well, where there is a demand for some of the more luxurious cars.”

THE ECONOMICS OF HIJACKING

Motor vehicles in South Africa come with a hefty price tag. For example, in the United States, a Volkswagen GTI starts at 25,000 US dollars whereas in South Africa, the same model starts at 37,261 US dollars.

Roodt explained that the cost of a hijacking not only has a severe financial impact on an individual, but also an immeasurable economic impact on a country’s economy.

(READ MORE: Information sharing necessary to combat crime in S.Africa)

“South Africa is pretty much known for its high levels of crime, murder, car hijackings and that of course sends out a bad message that South Africa is not a very friendly place to do business and inevitably impacts the economy as well. We do not know what business and investment we are losing out on or what the allocation of resources to the economy could be,” said Roodt.

Another missed opportunity would be on tourism. He added that if a certain area is perceived to be dangerous for its crime, tourists will usually avoid it which means they don’t go out as often as they should or spend as much money as they would in a safer region.   

"It is usually to the poorer areas where tourists don’t want to go to because some of those areas are perceived to be danger areas."

 On the other hand, hijacking has provided certain companies with a lucrative business opportunity.

ONE'S LOSS IS ANOTHER'S GAIN

With the cost of a hijacking being a loss for consumers, secondary businesses such as vehicle tracking companies, insurance firms and anti-hijack driving schools, have managed to turn the opportunity into a profitable one. 

"Hijackers could also have a huge impact on other parts of the economy as well. For example, you have to put immobilisers and anti-hijacking devices into your cars, you have to pay a premium to insurers to replace your car, which costs a lot so it’s not just a matter of a lost car, but there’re also other costs."

While these costs may set a consumer back, some secondary businesses such as vehicle tracking companies are looking to invent a more cost-effective anti-hijack system.  

THE LATEST ANTI-HIJACKING TECHNOLOGY

Unlike traditional tracking companies, that install a single tracking device into a vehicle, DataDot Technology fixes 10,000 microdots, each etched with a unique pin code, into the body of a vehicle making it virtually impossible to remove.

Derek Menday, sales director of DataDot explained that if a vehicle is stolen, police will be able to trace its location using a single installed microdot.

“DataDot technology is the trace or DNA for our vehicle. Cloning is a big part of organised crime as it’s the best way for them to turn assets into cash,” said Mendey.

“Twenty per cent of the cars are chopped up for parts, between 10 and 15 per cent leave the country but 60 per cent remain here and have their identities changed and are driven on our roads. Now those can be found and traced because they can’t get rid of its entire DNA.”

Kheepe Moremi from DataDot added that as of 2012, South African legislation has made it compulsory for all vehicles registered in the country to be fitted with microdots. 

Catch the special broadcast of hijacking the economy on CNBC Africa channel 410, Tuesday 19 August 2014 at 13:30 CAT/12:30 WAT/ 14:30 EAT 

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