The Impact of Illicit Financial Outflows on SA’s Economic Growth

Authors

  • Dr. Mthunzi Brian Bhengu Graduate School at The Management College of Southern Africa MANCOSA (A Member of Honoris United Universities), 26 Samora Machel Street, Durban, 4001, SA https://orcid.org/0009-0004-2675-1141
  • Adjunct Professor Wilbert Chagwiza Department of Mathematical and Computational Sciences, Science, Engineering and Agriculture, University of Venda, Thohoyandou, SA

Keywords:

Economic growth, Illicit financial outflows, Resource mobilisation, SA, Socio-economic challenges, Trade value gaps

Abstract

Background: The Sustainable Development Goals 16.4 and 17.1 call for reducing illicit financial flows (IFFs) and domestic resource mobilisation. IFFs constitute resource leakage, and drain resources intended to propel economic growth inevitably reducing the South Africa (SA) government's ability to address socioeconomic challenges. Consequently, infringing on SA citizens’ social and economic rights as entrenched in the constitution.

Aim: This paper aimed to ascertaining the impact of IFFs on SA economic growth and to assist the SA government in crafting strategies to curb IFFs.

Materials and Methods: Sequential exploratory mixed method research was used to enable triangulation of research outcomes. Partner Country Method, Multi-regression econometric model was employed to identify trade value gaps, to establish a correlation between IFFs and economic growth and semi-structured interviews were conducted.

Findings: IFFs from SA export and import sectors were estimated to be R4.9 trillion between 2000 and 2020. The official GDP was 436.7 billion rands less than the recalculated GDP, the difference is attributed to IFFs.

Recommendations: SA should adopt the following strategies to curb IFFs: global trade information exchange, minimum tax regime, Sixth Method, active citizenry, localise beneficiation of minerals, whistle-blower comprehensive program, invest in IFFs focused research, and political will in implementing IFFs legislations.

Future research: Role of multinational corporates as beneficiaries and paddlers of IFFs should be investigated against their ethical obligation vis-à-vis profit maximisation.

Downloads

Download data is not yet available.

Downloads

Published

01-08-2025

Issue

Section

Articles

How to Cite

Bhengu, M. B., & Chagwiza, W. (2025). The Impact of Illicit Financial Outflows on SA’s Economic Growth. TWIST, 20(3), 201-210. https://twistjournal.net/twist/article/view/845

Share

Most read articles by the same author(s)

1 2 3 4 5 6 7 8 9 10 > >> 

Similar Articles

1-10 of 314

You may also start an advanced similarity search for this article.