South Africa’s R280bn illicit economy costs 87,000 jobs, tax revenue and growth

South Africa’s illicit economy is estimated at R280 billion a year, with more than 87,000 formal jobs displaced and at least R68 billion in annual tax revenue lost, according to a new ECMX study commissioned by the CGCSA

South Africa is losing billions of rands in economic activity and tax revenue to illicit trade, with the illegal economy estimated to be valued at R280 billion a year.

This is according to a new report by economic consultancy ECMX, commissioned by the Consumer Goods Council of South Africa (CGCSA). The report found that illicit trade is also costing the economy R126 billion in GDP and displacing more than 87,000 formal jobs.

The study looked at 12 sectors, including alcohol, tobacco, clothing and textiles, food, fuel, mining, pharmaceuticals, gambling, cosmetics and personal care, chemicals, non-alcoholic beverages, and toys and games.

It estimates that the government loses at least R68 billion a year in tax revenue as illicit trade takes business away from compliant companies.