Industry urges South Africa to curb illicit trade as report reveals economic losses

Tawanda Karombo

Industry players are urging the South African government to prioritize policies to curb illicit trade through the crafting of an anti-illicit trade strategy, strengthening border controls and utilising technology in securing supply chains.

This follows the release of the Transnational Alliance to Combat Illicit Trade (TRACIT) report reviewing South Africa’s fight against illicit trade this week.

The report, released in conjunction with Business Unity South Africa (Busa), highlights how South Africa’s economy continues to be threatened by illegal trade, specifically in sectors such as alcohol, tobacco, food items, pharmaceuticals, agri-chemicals, counterfeiting, mining, and wildlife trafficking.

It notes that illicit trade in tobacco and alcohol alone was costing South Africa as much as R30 billion a year in lost revenue.

“Illicit trade deprives the government of critical revenue, fuels organised crime, and puts legitimate businesses at a disadvantage,” said Philippe Van Gils, director of illicit trade prevention at Philip Morris International on Tuesday.

Philip Morris International is thus urging the South African government to consider crafting of a national anti-illicit trade strategy, integrating smart tax policies, robust regulatory enforcement, and corruption safeguards.

It also believes that strengthening border control and customs capacity, particularly at high-risk points such as ports and Free Trade Zones will help to curb illicit trade.

Moreover, securing supply chains with digital track-and-trace systems and enhanced due diligence requirements for manufacturers and logistics providers is also seen improving measures to reduce illicit trade in substances such as alcohol, wildlife, tobacco and others.;

“The TRACIT Index reminds us that a comprehensive approach is required, one that addresses corruption, strengthens enforcement, and ensures regulatory frameworks are both appropriate and effectively implemented,” added Van Gils.

South Africa ranked 60th out of 158 countries, “indicating moderate resistance to illicit trade, but with notable vulnerabilities in areas such as supply chain control and enforcement” capacity.

“The country performs strongly in trade, customs, and borders, reflecting progress in cross-border enforcement and customs modernization. However, performance remains weak in supply chain intermediaries , criminal enablers and sectoral illicit trade, highlighting systemic gaps in oversight, regulation, and inter-agency coordination,” notes the report.

TRACIT director general, Jeffrey Hardy, said that “now is the time for bold policies and strong enforcement to dismantle illicit networks” in South Africa and across the world.

“South Africa stands at a crossroads,” said Hardy, noting the continued threat illicit trade posed to South Africa’s economic recovery, public safety, and institutional integrity.

“Despite authorities’ efforts a to address illegal trade, corruption, and money laundering, illicit trade remains deeply entrenched and highly damaging,” said Esteban Giudici, TRACIT director of programs.

“If left unchecked, it will continue to rob the government of vital revenues, distort legal markets, and deter both domestic and foreign investment.”

Alongside other industry players, Philip Morris South Africa said it remained committed to playing its part in combating illicit trade through “collaborating with law enforcement and customs agencies; investing in digital authentication and track-and-trace technologies; running consumer awareness campaigns on the dangers of illicit products and supporting regional cooperation” efforts.

“The TRACIT Index gives South Africa and other nations a playbook for action. We urge all stakeholders—public and private—to align, act, and protect our economies from the corrosive effects of illicit trade and corruption,” added Van Gils.

BUSINESS REPORT