South Africa’s R280bn illicit economy costs 87,000 jobs, tax revenue and growth
new ECMX report commissioned by the Consumer Goods Council of South Africa estimates that illicit trade costs the country R126bn in GDP, 87,000 formal jobs and at least R68bn in annual tax revenue
South Africa's illicit economy, valued at R280 billion annually, is causing a significant loss in economic activity, tax revenue, and job opportunities, according to a new report by ECMX. The illegal trade is costing the economy R126 billion in GDP and displacing over 87,000 formal jobs. The report, which examined 12 sectors including alcohol, tobacco, clothing, food, fuel, mining, pharmaceuticals, gambling, cosmetics, chemicals, non-alcoholic beverages, and toys and games, found that the government loses at least R68 billion in tax revenue due to illicit trade.
Illicit trade is closely linked to organized criminal networks involved in customs fraud, smuggling, counterfeiting, money laundering, and corruption, often operating across multiple industries. These networks adapt their methods to evade enforcement and exploit weaknesses in border management and supply chains. The impact extends beyond economic activity to governance and national security, with South Africa's GDP estimated to be R126 billion smaller as a result of illicit trade.
Compliant businesses also lose out, with demand shifting towards legitimate manufacturers, wholesalers, and retailers. CGCSA CEO Zinhle Tyikwe emphasized that tackling illicit trade should be a priority, not just a law enforcement issue. The government has announced a national illicit economy disruption program, which will use data analytics, AI, stronger coordination, and stricter enforcement to target high-risk sectors and hold illegal operators accountable.
Written by urgent.news from IOL's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
