By Josias Pila
Building an inclusive economy that creates jobs, expands business opportunities and improves the lives of all South Africans remains a central priority of the Seventh Administration. Government is pursuing a range of policies and programmes to accelerate economic growth, attract investment and unlock greater opportunities for businesses. Among these is Operation Vulindlela, a programme focused on removing barriers to economic growth and improving the performance of key sectors of the economy.
The Operation Vulindlela Phase II Q1 Progress Report, released in July 2026, demonstrates that steady progress is being made in implementing reforms aimed at improving South Africa’s competitiveness, easing constraints to growth and creating the conditions for greater private-sector investment. Important reforms are underway in priority areas including water and sanitation, digital public infrastructure, electricity, freight logistics, visa reform and local government.
These reforms matter because a growing economy creates the foundation for investment, enterprise development and, most importantly, jobs. But the gains we are making are at risk of being undermined by another economy operating alongside the legitimate one: ‘the illicit economy’.
The illicit economy is estimated to cost South Africa R84.6 billion a year. Illicit trade is a major driver of this harmful economy and includes the unauthorised production, smuggling, counterfeiting and unlawful sale of goods, as well as the distribution of products that are unregulated or falsely declared.
This is not a victimless crime. Every counterfeit or illegally traded product that enters the market has consequences beyond the transaction between a buyer and a seller.
Illicit trade undermines legitimate businesses that comply with tax, labour, safety and regulatory requirements. It deprives the state of revenue that could otherwise be invested in healthcare, education, infrastructure, community safety and other essential public services. It also threatens jobs by placing law-abiding businesses under unfair competitive pressure and weakening the markets in which they operate.
The consequences are particularly serious when illicit goods pose risks to public health and consumer safety. Counterfeit medicines and cosmetics may contain unverified or harmful ingredients. Non-compliant electrical products can create fire and safety hazards. Illicit alcohol and tobacco products evade the regulatory and safety controls designed to protect consumers. At the same time, illicit markets provide fertile ground for organised criminal networks to generate income and expand their activities.
The fight against illicit trade must therefore be understood as an important part of the broader effort to build a fair, inclusive and growing economy.
When consumers choose legitimate products and support compliant businesses, they are doing more than protecting themselves. They are helping to protect jobs, support local manufacturers and producers, strengthen township and rural economies, and reduce the demand that sustains criminal markets.
Buying local is equally important to strengthening our economy. When South Africans choose locally produced goods and services, they help keep money circulating within the domestic economy, support local manufacturers, farmers, small businesses and entrepreneurs, and contribute to the preservation and creation of jobs. Supporting local production also strengthens domestic supply chains, encourages investment in productive capacity and helps build a more resilient and competitive economy.
Buying local does not mean compromising on quality. It means making conscious choices to support products and services that are lawfully produced, compliant with our standards and contribute to South Africa’s economic development. It is a practical way for consumers to participate in building the economy we want. Every time consumers choose locally produced, genuine and compliant products, they support businesses that employ South Africans, contribute to the tax base and invest in their communities.
This is particularly important as government works to create an environment in which small businesses, manufacturers, farmers, artisans and entrepreneurs can grow and contribute meaningfully to the economy. These businesses cannot compete on a level playing field if unlawful operators are allowed to sell goods without meeting the same tax, safety, quality and regulatory obligations.
A developmental state cannot realise its economic ambitions while unlawful markets are allowed to erode legitimate enterprise, compromise consumer safety and siphon resources from the public purse.
Government’s response is underpinned by a comprehensive legislative and enforcement framework. The Counterfeit Goods Act provides measures to combat the trade in counterfeit products, while the Customs and Excise Act gives authorities powers to control prohibited and restricted goods and to detain suspected counterfeit goods at the border. The Consumer Protection Act further provides protections against unsafe, substandard and unfairly marketed products. These measures are being strengthened through the National Illicit Economy Disruption Programme, which brings together key state agencies and other stakeholders to disrupt illicit markets through coordinated enforcement, better information sharing and the use of data and technology.
These policy measures are being reinforced by intensified action on the ground. Collaboration between law enforcement agencies, the Border Management Authority and the National Consumer Commission is helping to strengthen inspections, identify non-compliant products and prevent unsafe and illicit goods from entering or circulating in the South African market.
Recent enforcement operations demonstrate both the scale of the challenge and the importance of coordinated action. In March this year, police reported seizures worth more than R160 million across several parts of the country, including a major operation in Bellville, City of Cape Town that resulted in the seizure of more than 130 000 counterfeit items. In July 2026, law enforcement agencies seized more than R27 million worth of counterfeit and illicit goods during major multidisciplinary operations.
These interventions are important not only because they remove unlawful and potentially dangerous goods from circulation, but because they demonstrate that South Africa will not allow criminal markets to operate with impunity.
Yet enforcement alone will not win this fight.
The private sector has an equally important role to play. Businesses must strengthen their supply chains, verify the authenticity and origin of products, maintain appropriate compliance measures and avoid suppliers who cannot account for the quality, provenance and legality of their goods.
Consumers, too, have agency. We should buy from reputable outlets, check packaging and relevant safety or authenticity markings, and be cautious of products offered at prices that appear too good to be true.
The public also has a role in disrupting these markets by reporting the sale and distribution of counterfeit and illicit goods. Report suspected criminal activity at their nearest police station, through Crime Stop on 08600 10111, or anonymously through the MySAPS App. By making informed purchasing choices and reporting illicit activity, consumers can become active partners in protecting South Africa’s legitimate economy.
Ultimately, the fight against illicit trade and the call to buy local are part of the same economic project. We cannot build a strong domestic economy if legitimate South African businesses are undermined by counterfeit and illegally traded goods.
Pila is Director: Cluster Support at the Government Communication and Information System
