Illegal economy costs S.Africa $26 bn: minister
South Africa's economy is losing 178 billion rands ($26 billion, 18 billion euros) to illicit trade in areas like mining, tobacco and textiles, Intelligence Minister Siyabonga Cwele said Thursday.
“In 2010, we reported the loss in the gold industry amounting to 6.7 billion rands,” Cwele told parliament.
“We have… subsequently scoped the extent of the illicit economy, which is estimated to be about 10 percent of our GDP quantified to a loss of about 178 billion rands to the economy.”
Cwele said off-the-books trade was especially rife in the mining, textile and tobacco industries, and was costing South Africa hundreds of thousands of jobs.
“We see this as a threat to our new economic growth path”, which aims to create five million new jobs by 2020, Cwele told journalists ahead of delivering his budget speech.
Africa’s largest economy has been cited as a regional hub for illegal trade in guns, drugs, cigarettes, counterfeit goods and poached animals.
A 2002 study by the International Monetary Fund put the size of South Africa’s shadow economy at 11 percent of GDP, nearly the same proportion cited by Cwele.