Illicit trade costs South Africa about R68 billion a year in lost tax revenue, according to a study commissioned by the Consumer Goods Council of South Africa (CGCSA) and carried out by the economic consultancy Econometrix. The figure was published in early September 2026 and was discussed again on 12 October in a BusinessTech “Business Talk” interview with Econometrix chief economist Azar Jammine and CGCSA executive Abraham Nelson.
The CGCSA is an industry association that represents more than 9 000 member companies across consumer goods, retail and services. It paid for the research, so the numbers are a commissioned estimate, not an official government count.
What the study found
According to TimesLIVE, the study values the illicit market at about R280 billion across 12 sectors and finds that at least R68 billion in tax revenue is lost every year. It also estimates that more than 87 000 potential formal jobs are lost. The sectors TimesLIVE names are alcohol, clothing and textiles, food, automotive fuel, pharmaceuticals, tobacco, cosmetics and personal care, and toys and games.
Outlets do not agree on how many sectors the work covers. An opinion piece on BusinessTech describes the CGCSA research as covering 11 sectors and does not name them, while TimesLIVE reports 12.
The study adds that the regulated economy is R126 billion smaller because of illicit trade, and that compliant businesses forgo R193 billion in formal production.
Ilse Fieldgate, head of economic consulting at Econometrix, told TimesLIVE that illicit trade also suppresses wholesale, logistics, retail and distribution activity, which reduces wages and career progression. Workers who move into illicit or informal supply chains often lose protections such as minimum wages, unemployment insurance and pension benefits. Job losses fall disproportionately on low and semi-skilled workers.
She also said illicit trade is increasingly tied to organised networks involved in customs fraud, smuggling, counterfeiting, money laundering and corruption, and that these networks adapt to enforcement and exploit weak border and regulatory controls. TimesLIVE cites the closure of British American Tobacco’s Heidelberg factory, which the company blamed on the illicit cigarette market, as an example.
What R68 billion means for the budget
In an editorial on 8 September, TimesLIVE and the Sunday Times set the study’s figure against the public finances. It says R68 billion is about 2.9% of consolidated government spending, nearly 20% of annual debt-service costs and more than 20% of the budget deficit.
The study also offers illustrative comparisons: the lost revenue could theoretically fund about 145 000 teachers, 123 000 professional healthcare workers or 171 000 police officers. The editorial calls these comparisons “deliberately illustrative” and not a proposal to redirect the money. It notes that the study itself warns the full R68 billion cannot realistically be recovered immediately.
For alcohol alone, the study estimates that illicit trade displaces R23.4 billion in direct GDP a year, costs about R16.9 billion in direct tax and displaces more than 6 000 direct jobs, according to the editorial.
The editorial is an opinion. It argues that enforcement is too intermittent and fragmented and leans on headline-grabbing seizures that do not dismantle networks, and it calls for stronger coordination among SARS, border authorities, police and regulators. It accepts that heavy taxes and regulation may push some buyers towards illicit markets, and says that deserves debate, but argues it cannot excuse criminal activity.
A different estimate and the proposed response
The R68 billion figure is not the only estimate in circulation. An opinion piece published by BusinessTech on 7 September cites a separate study by Frans Cronje Private Clients, Shadow State Rising, which puts the cost at R84.6 billion, about 1% of GDP and 3.9% of total government revenue. That study says tobacco, illegal mining and alcohol account for roughly 90% of illegal activity. The two estimates use different methods and are not reconciled in the piece.
The same piece quotes CGCSA chief executive Zinhle Tyikwe, who argues that crime affecting consumer goods has become a challenge to economic competitiveness and not only a public safety issue. “Every rand diverted into the illicit economy is a rand that cannot be invested in economic growth,” she says. The CGCSA lists cargo theft, extortion, cybercrime, attacks on logistics networks and illicit goods entering supply chains among the threats that raise the cost of doing business.
The CGCSA wants an industry anti-crime platform that links business, government, law enforcement and civil society, built on the earlier work of Business Against Crime South Africa, which was founded in 1996. Tyikwe told TimesLIVE that illicit trade is “not merely an enforcement priority” but “an economic imperative”, and that success should be measured by arrests and successful prosecutions of the criminal networks involved.
Shadow State Rising makes a separate recommendation: a public-private task force that includes SARS, the National Prosecuting Authority and the SAPS, with private-sector observers and advisers.
On the government side, TimesLIVE notes that President Cyril Ramaphosa has called illicit trade and organised crime threats to economic development, and that government has announced a national illicit economy disruption programme.
The BusinessTech interview features Nelson, who spent more than 30 years with the SAPS and now heads the CGCSA’s Crime Risk Initiative, and Jammine, who has been chief economist at Econometrix since 1985. According to BusinessTech’s summary, they discuss which industries are most exposed, what illicit trade means for ordinary South Africans and what law enforcement and government should do. The interview is a video, and BusinessTech’s written summary does not explain how the R68 billion was calculated.
Source: BusinessTech.
