<\/p>\n
A report by Econometrix indicates that illegal mining is South Africa\u2019s biggest illicit market, even ahead of the historically problematic tobacco black market.<\/p>\n
Together with gambling, the three sectors account for 58% of the country\u2019s overall illicit economy, conservatively estimated to be worth R280\u00a0billion across 12 sectors.<\/p>\n
Read:
SA\u2019s abandoned mines expose costly failures in regulation and accountability
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Families return home after fleeing zama zama violence<\/p>\n
Illegal mining is estimated to be worth R60 billion, with gambling at R55 billion and illicit tobacco at R45 billion.<\/p>\n
Zama zamas (illegal miners operating at abandoned and functional mines) have long been a pain for the formal industry, threatening the viability of mining companies across the commodity spectrum \u2013 including\u00a0precious metal ore, platinum group metals, gold-bearing material and rough diamonds.<\/p>\n
Econometrix published the findings of its study on Thursday, in another bid to quantify the devastating impact of sectors undercutting an already anaemic economy.<\/p>\n
While mining, gambling and tobacco, along with alcohol, are among the most affected sectors, it found that the crisis is not isolated within a limited set of industries \u2013 it affects the entire economy by crushing legal businesses, eating into tax revenue, displacing jobs, exposing consumers to unsafe products and fuelling organised crime.<\/p>\n
Source: Econometrix and Consumer Goods Council report<\/p>\n
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As a result, South Africa\u2019s GDP is R126 billion smaller within the regulated economy, and compliant businesses forfeit R193 billion in formal production.<\/p>\n
A total of more than 87 000 direct jobs are displaced, meaning formal jobs that would otherwise have been created do not exist because of illicit trade.<\/p>\n
This has compounded the unemployment crisis which rose to 33.6% in the second quarter of 2026, the highest since the second quarter of 2022.<\/p>\n
\u201cFactories, jobs and local economic activity have vanished or failed to materialise,\u201d the report said of an economy battling to consistently breach the 1% growth mark on average annually, pulling it back from the ability to create meaningful jobs.<\/p>\n
A good example of the loss of jobs as a direct consequence of illicit trade is the closure of the British American Tobacco (BAT) factory in Heidelberg.<\/p>\n
The shutdown is expected to be completed by the end of the year. Once the closure is completed, BAT will no longer manufacture cigarettes in South Africa and will instead rely on imports to meet the domestic market\u2019s needs.<\/p>\n
Read: BAT: \u2018We\u2019ve reached the limit\u2019 as SA factory closure confirmed<\/p>\n
\u201cBy diverting demand away from compliant firms, illicit trade suppresses formal production, wholesale activity, logistics, retail, distribution and related business services,\u201d said Ilse Fieldgate, head of economic consulting at Econometrix.<\/p>\n
\u201cLower formal-sector activity constrains job creation, reduces wage income and limits opportunities for skills development and career progression.\u201d<\/p>\n
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Tens of billions of forgone tax revenue<\/p>\n
According to the report, South Africa loses out on at least R68 billion a year in tax revenue due to illicit trade, holding back the government\u2019s ability to fund infrastructure, healthcare, education, policing, housing, social protection and industrial development, while increasing pressure on borrowing and debt-service costs.<\/p>\n
This is more or less on par with other estimates of the tax losses and includes losses in value-added tax, excise tax, fuel levies, and custom tax.<\/p>\n
Read: How Sars went from near-collapse to record collections<\/p>\n
This is revenue that government could have put to better use, the report said.<\/p>\n
It estimates that nearly 145 000 teachers, more than 122 000 healthcare workers and 171 000 police officers could be onboarded in the public sector with the recovered revenue (theoretically).<\/p>\n
Source: Econometric and Consumer Goods Council report<\/p>\n
SA\u2019s future in the balance<\/p>\n
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The report was commissioned by the Consumer Goods Council of South Africa (CGCSA), which said the findings demonstrate that illicit trade is not simply a law-enforcement issue but an economic development issue.<\/p>\n
\u201cUltimately, the choice is not simply between tolerating or combating illicit trade. It is a choice between allowing scarce economic resources to continue flowing into the shadow economy, or redirecting them towards productive investment, sustainable employment, stronger public finances and inclusive economic development,\u201d said CGCSA CEO Zinhle Tyikwe.<\/p>\n
\u201cWhile the announcement of Operation Ukubusa to disrupt the illicit economy is a welcome step in the right direction, South Africa\u2019s future is being held to ransom by the criminal enterprises behind the illicit trade.\u201d<\/p>\n
Operation Ukubusa, South Africa\u2019s National Illicit Economy Disruption Programme, was announced by President Cyril Ramaphosa during his February 2026 State of the Nation Address.<\/p>\n
The initiative is meant to aggressively clamp down on organised crime, illegal trade networks, and economic sabotage.<\/p>\n
\u201cEvery day they [black market traders] remain free to continue ransacking the economy pushes the country closer to a tipping point where the shadow economy takes over,\u201d Tyikwe warned.<\/p>\n
\u201cWe will know we are turning the corner when we see arrests and successful prosecutions of the kingpins behind illicit trade,\u201d she added, calling for a greater collaboration with law enforcement to tackle the issue.<\/p>\n
Read\/listen: Industry unites to tackle counterfeit trade with new task forces<\/p>\n
#Zama #zamas #trump #illicit #tobacco #black #market #trade<\/p>\n","protected":false},"excerpt":{"rendered":"
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