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Illegal economy costing SA billions

Jun 02 2011 14:38
Cape Town - The illicit economy is costing South Africa billions and biting hard into the country's gross domestic product (GDP), State Security Minister Siyabonga Cwele said on Thursday.

"In 2010 we reported the loss in the gold industry amounting to R6.7bn," he told the National Assembly during debate on his budget vote.

"We have, with the cooperation and collaboration of other government departments, subsequently scoped the extent of the illicit economy which is estimated to be about 10% of our GDP, quantified to a loss of about R178bn to the economy," he said.

The illicit economy had the potential to seriously compromise the new economic growth path and was costing South Africa hundreds of thousands of jobs.

The scoping exercise revealed that this economic threat was rife in the mining, textile and tobacco industries, he said.

"These illicit activities create unfair competition to legitimate businesses and industries, erode the corporate tax base, distort trade, violate foreign exchange regulations, and create conducive conditions for espionage.

"This year, the security and economic clusters will focus on attracting and developing specialised skills and sophisticated technologies to counter this illicit economy," Cwele said.

At a media briefing earlier, director general Jeff Maqetuka said the illicit economy could be "even bigger than we think", because investigations are still continuing.
sa economy  |  corruption  |  gdp



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