The Mercury

Govt set to curb illicit trade

- Gaye Davis

TRADE in illegal goods – including gold, diamonds, platinum, cigarettes, textiles and endangered species – cost the South African economy at least R178 billion, or 10 percent of GDP, State Security Minister Siyabonga Cwele said.

He told MPs during his budget vote debate in Parliament yesterday that illegal mining had cost the gold industry R6.7bn in 2010.

Cwele said that the government’s security and economic clusters would this year focus on curbing this illicit economy by attracting specialist skills and developing sophistica­ted technologi­es.

A scoping exercise carried out in co-operation with other government department­s put the size of the illicit economy at 10 percent of GDP, equivalent to a loss of R178bn to the economy. The problem affected not only South Africa, but also its neighbours.

Cwele gave a terse “no comment” when asked whether he would heed calls for his resignatio­n after it emerged that he was not aware that his wife, Sheryl, convicted of drugsmuggl­ing charges, had also been engaged in the illicit economy.

Referring to the fight against fraud and corruption, Cwele said security cluster department­s had decided to clean up their own houses first. The State Security Agency and the Financial Services Board had uncovered fraud amounting to between R3m and R5m involving its group life insurance scheme for members. The insurance broker’s licence had been withdrawn, but agency management staff had also been implicated, and the matter had been handed over to the police and the National Prosecutin­g Authority. Cwele said the insurance company had made “a significan­t ex gratia payment” to compensate the fund.

Opposition MPs questioned the decision to create a single state security agency by merging the country’s civilian agencies. Cwele said there would be “extensive” consultati­on on the bill once it came before Parliament, and that “lessons” had been learnt from working on the Protection of Informatio­n Bill.

Cwele denied that the ANC was trying to steamroll the informatio­n bill through and said it was “keen to continue engaging”.

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