{"id":876688,"date":"2026-09-26T11:00:00","date_gmt":"2026-09-26T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=876688"},"modified":"2026-09-25T17:03:54","modified_gmt":"2026-09-25T15:03:54","slug":"south-africas-secret-r84-billion-economy","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/876688\/south-africas-secret-r84-billion-economy\/","title":{"rendered":"South Africa&#8217;s secret R84 billion economy"},"content":{"rendered":"\n<p>South Africa&#8217;s illicit economy is worth billions, with global rankings placing the country as one of the worst in the world for organised crime.<\/p>\n\n\n\n<p>The illicit economy comprises numerous criminal activities, such as smuggling, the sale of counterfeit goods, and illegal mining.<\/p>\n\n\n\n<p>In a recent study by Frans Cronje Private Clients, titled Shadow State Rising, the illicit economy was valued at roughly R84.6 billion each year.<\/p>\n\n\n\n<p>The amount represents a significant portion of South Africa&#8217;s total GDP, with illicit tobacco and alcohol sales accounting for the largest share, along with illegal mining operations.<\/p>\n\n\n\n<p>In its study, Frans Cronje Private Clients drew parallels between illegal operations and South Africa&#8217;s formal economy, noting that both operate in similar ways.<\/p>\n\n\n\n<p>While both operate similarly, the illicit economy generates no tax revenue, meaning its R84 billion value represents a significant economic blow to the country.<\/p>\n\n\n\n<p>Organised crime is a significant issue in South Africa, and the country also performs poorly on the global stage.<\/p>\n\n\n\n<p>The <a href=\"https:\/\/ocindex.net\/country\/south-africa\">Global Organised Crime Index<\/a> ranks each country based on the prevalence of different illegal activities and its ability to combat them, represented by a criminality score and a resilience score.<\/p>\n\n\n\n<p>The index ranked South Africa as having the 7th-highest criminality score among 193 surveyed countries, at 7.43 out of 10.<\/p>\n\n\n\n<p>South Africa also received the second-highest criminality score in Africa and the highest out of 13 Southern African countries.<\/p>\n\n\n\n<p>The index cited several weaknesses in South Africa&#8217;s capacity to combat illegal activities, including its response to goods smuggling.<\/p>\n\n\n\n<p>It noted that gaps in border controls contributed to the country&#8217;s struggles with counterfeit and illegal goods entering its economy.<\/p>\n\n\n\n<p>&#8220;The counterfeit goods market is pervasive, driven by weak border enforcement and the involvement of criminal networks operating across the Mozambique-South Africa border,&#8221; it said. <\/p>\n\n\n\n<p>&#8220;Seizures of counterfeit clothing, footwear, electronics and pharmaceuticals indicate the scale of the market, which has strong transnational ties&#8221;.<\/p>\n\n\n\n<p>&#8220;Illicit trade in excise goods, particularly tobacco and alcohol, is significant,&#8221; the index noted, echoing the observation made by Frans Cronje Private Clients&#8217; study.<\/p>\n\n\n\n<p>The index noted that despite government intervention efforts, such as the Border Management Authority, illicit trade remains prevalent. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">South Africa&#8217;s resilience<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"577\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166-1024x577.jpg\" alt=\"\" class=\"wp-image-650875\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166-1024x577.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166-768x433.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/12\/SAPS-saluting-e1772858080166.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<p>Despite having one of the highest global criminality scores, South Africa also had a respectable resilience score of 5.67 \u2013\u00a0the third highest in Africa.<\/p>\n\n\n\n<p>The score also placed South Africa 44th among the 193 ranked countries, with the index noting its strong legal framework for combating organised crime.<\/p>\n\n\n\n<p>While the index praised the country&#8217;s &#8220;robust legal framework to combat organised crime&#8221;, it noted that governance issues continuously erode public trust.<\/p>\n\n\n\n<p>&#8220;Government transparency is a challenge despite an extensive legal framework for accountability,&#8221; it said. &#8220;Challenges such as maladministration and financial mismanagement erode public trust.&#8221;<\/p>\n\n\n\n<p>&#8220;Despite governance improvements, challenges such as corruption, weak rule of law, and economic inequality hinder resilience.&#8221;<\/p>\n\n\n\n<p>It also noted that the agencies responsible for combating the illicit economy face several significant pressures.<\/p>\n\n\n\n<p>&#8220;Law enforcement agencies, including the South African Police Service, are under significant strain due to corruption, mismanagement and inefficiency,&#8221; it said.<\/p>\n\n\n\n<p>The ongoing Madlanga Commission has demonstrated the scale of governance issues across South Africa&#8217;s crime prevention agencies.<\/p>\n\n\n\n<p>The inquiry has implicated several high-ranking officials in criminal operations and corruption, and was recently extended by President Cyril Ramaphosa.<\/p>\n\n\n\n<p>The Organised Crime Index also noted financial constraints as a major limitation in South Africa&#8217;s ability to combat illicit activities.<\/p>\n\n\n\n<p>&#8220;Financial constraints hinder law enforcement, and a significant funding shortfall affects investigative capacity,&#8221; it said.<\/p>\n\n\n\n<p>&#8220;Prevention efforts against organised crime are underfunded and inconsistently implemented.&#8221;<\/p>\n\n\n\n<p>The Index also cited Business Against Crime South Africa (BACSA) as a positive contributor to the country&#8217;s fight against organised crime.<\/p>\n\n\n\n<p>The BACSA acts as an intermediary between the public and private sectors in South Africa in crime prevention.<\/p>\n\n\n\n<p>The Consumer Goods Council of South Africa (CGCSA) <a href=\"https:\/\/businesstech.co.za\/news\/business-opinion\/874038\/shadow-over-south-africa-thats-costing-over-r68-billion-a-year\/\">recently called<\/a> for a stronger relationship between the public and private sectors to combat the illicit economy.<\/p>\n\n\n\n<p>It proposed a new Anti-Crime Platform that would build on the BACSA to provide a foundation for &#8220;prevention, disruption, enforcement and measurable outcomes&#8221; in addressing the illicit economy.<\/p>\n\n\n\n<p>While the Organised Crime Index viewed the BACSA positively, it noted that private-sector confidence remained a concern.<\/p>\n\n\n\n<p>&#8220;Business Against Crime South Africa is a key intermediary between government and private sector actors in combating organised crime,&#8221; it said. <\/p>\n\n\n\n<p>&#8220;However, violent crime, infrastructure decay and regulatory uncertainty undermine business confidence and investment.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africa&#8217;s illicit economy is worth billions, and global rankings for organised crime place South Africa among the worst in the world.<\/p>\n","protected":false},"author":131,"featured_media":746361,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2103771826371400013","_sma_facebook_post_id":"191437357620492_2217135785773487","_sma_instagram_post_id":"18114377932885231","_sma_x_attempts":1,"footnotes":""},"categories":[4],"tags":[19673,17525,26421,26610],"class_list":["post-876688","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-business-against-crime-south-africa","tag-consumer-goods-council-of-south-africa","tag-frans-cronje-private-clients","tag-global-organised-crime-index"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=876688"}],"version-history":[{"count":19,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876688\/revisions"}],"predecessor-version":[{"id":876714,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876688\/revisions\/876714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/746361"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=876688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=876688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=876688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}