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Is crime leading to job creation?

Job creation in South Africa may actually benefit from criminal activity.

Picture: EWN

JOHANNESBURG - The saying goes crime doesn't pay, but it seems job creation in South Africa may actually benefit from criminal activity.

Efficient Group chief economist Dawie Roodt explains that the informal sector, which he describes as that part of the economy not being captured into formal data, contributes between 15 to 20% of the country's economic activity and employs a large number of people.

Ironically, Roodt notes that a significant part of the informal sector is directly related to criminal activity.

So does this mean that illegal transactions may in fact be creating jobs and that the country's unemployment rate may be lower than we think?

"Ten years back foreigners used to ask me about crime, they'd compare our murder rate and, depending on what source you use, it would be probably have been the highest in the world. So crime was pretty much the first question that they'd ask about. Nowadays when I speak to foreign investors the first thing they speak about to me is corruption," says Roodt.

But Roodt says it's impossible to measure the impact of crime on the South African economy as the numbers are not available.