If the closure of BAT does not convince people that the illicit economy kills jobs, nothing will. It is destroying legitimate manufacturing jobs and costs R30 billion annually in lost tax revenue while funding organised criminal networks.
Busisiwe Mavuso, CEO of Business Leadership South Africa BLSA, says in her weekly newsletter that last weeks announcement from British American Tobacco BAT that it will shut its only cigarette factory in South Africa this year demonstrates how policy failures and enforcement gaps are destroying legitimate manufacturing.
She points out that the factory has been operating at 35 capacity and can no longer sustain operations. About 230 direct jobs will be lost, but the ripple effects could affect 35 000 jobs across the value chain, from the 100 tobacco farmers in Limpopo, North West and Mpumalanga who produced more than seven million kilograms of tobacco last year, through to distributors and retailers.
