PwC’s biennial survey interviewed 6,337 participants across 115 countries, most of them upper level executives: 45 per cent were C suite executives (chiefs), while 30 per cent were heads of departments or business units.
The study found that the prevalence of economic crime increased from 50 to 57 per cent in Africa. The 7 per cent increase is shadowed closely only by Western Europe which saw a 5 per cent increase to 40 per cent, and the Middle East which saw a 4 per cent increase to 25 per cent.
All other world regions – North America, Eastern Europe, Latin America and Asia and the Pacific – saw a decline in economic crime.The global prevalence also fell marginally by 1 per cent for the first time since the 2009 global financial crisis.
Accounting for the relatively high spate of economic crime in Africa were South Africa, where 69 per cent of 232 organizations indicated that they had been victim to economic crime since the 2014 survey; and Kenya and Zambia, which saw a rise by 17 and 35 per cent respectively since 2014, to a prevalence rate of 61 per cent.
Compounding South Africa’s woes, it is also second among the top 15 countries that believe their local law enforcement agencies are not adequately resourced to combat economic crime.
Louis Strydom, Forensic Services Leader for PwC Africa, was quoted as saying: “When compared to the global statistic of 36%, we are faced with the stark reality that economic crime is at a pandemic level in South Africa.”
The rise in Western Europe is accounted for by cybercrime in France and the UK.
According to the survey, the spate of cybercrime increased and while it is the second most prevalent economic crime, it is not part of the top three types of economic crimes experienced in Africa, Asia Pacific and Eastern Europe: what is rather prevalent in these regions is high incidences of bribery and corruption and procurement fraud.
In Africa more than anywhere else, 48 per cent of respondents think it’s likely they will suffer from bribery and corruption in the next 24 months.
Financial services, state owned enterprises, retail, and transport and logistics were identified as industries most at risk of financial and economic crime.
Overall, the survey by PwC finds that the detection capabilities and response plans of businesses are not keeping pace with the level and range of threats now facing organisations.
Only 31 per cent of organisations carry out a fraud risk assessment annually and 22 per cent have never carried out such an exercise since 2014.
Trevor White, partner, Forensic Services and Global Survey Leader, PwC was quoted as saying: “While it is a positive sign that there has been increased detection by means of whistleblowing hotlines, far too much, is being left to chance by organisations – economic crimes discovered by accident more than doubled from 6% in 2014 to 14% in 2016. Another eight percent of survey respondents could not even tell us how serious economic crimes against their organisations were detected.”
Even amidst the high spate of cybercrime, globally, only 35 per cent of organisations have a fully operational cyber response plan and only 34 per cent have personnel that are fully trained. About 20 per cent will have to make use of outsourced personnel should they encounter cyber attacks.
By Emmanuel Odonkor