Tax Justice SA warns: South Africa loses R250 million daily to illicit trade
South Africa is losing more than R250 million every day to criminals in the shadow economy, Tax Justice South Africa (TJSA) said, calling for illicit trade to be declared a national emergency.
“Every rand looted results in a school not built, a hospital not equipped, a home not delivered,” said Yusuf Abramjee, founder of Tax Justice SA. “This crisis is stealing the future from our people.”
Illicit cigarettes alone cost the country an estimated R28 billion a year, while illicit alcohol contributes to losses of about R16.5 billion annually, according to the organisation.
The warning comes in the wake of the African Union’s new “Mbeki II” report, compiled by the High-Level Panel on Illicit Financial Flows (AU HLP), which shows that illicit financial outflows from Africa have worsened since former President Thabo Mbeki first exposed the issue a decade ago.
Instead of leading the fight against the problem, Abramjee said South Africa has “sunk deeper into the problem”.
He cited the country’s greylisting by global financial watchdogs in 2023 as a sign of government inaction.
“We were greylisted by financial watchdogs in 2023 because the government failed to act. Yet still nothing changes,” Abramjee said.
“Al Jazeera’s Gold Mafia investigation laid bare massive international money laundering through South Africa. Two years later, not a single arrest has been made. Criminals are laughing at us, while honest, hard-working South Africans pay the price.”
The AU report paints a stark picture of weak enforcement, fragmented initiatives, and political apathy in the face of a worsening crisis.
Abramjee urged that illicit trade be placed at the top of the agenda in the forthcoming National Dialogue.
“This is a national emergency,” he said. “We are being looted on an industrial scale, and the government must act with urgency. South Africans deserve protection from the criminal syndicates that are bleeding us dry.”
TJSA said it will continue campaigning for urgent action and raising awareness about the scale of losses, which undermine both government and the rule of law.