South Africa’s shadow economy set to rise by 2025

Online since 5.07.2017 • Filed under Industry news
South Africa’s shadow economy set to rise by 2025

South Africa is set to fail on reducing the size of its ‘shadow economy’—the production of and trade in legal goods and services that are deliberately and often illegally concealed from public authorities—by 2025, according to a new study from ACCA (the Association of Chartered Certified Accountants).

Emerging from the shadows: the shadow economy to 2025, estimates that the shadow economy represented 23.29% of GDP in 2016 – totalling an approximate ZAR 1,000bn. This is forecast to rise to 24.19% of GDP by 2025.

The global average is expected to fall from 22.5% to 21.39% of GDP over the same period.

‘The prevalence of shadow economy activity creates considerable practical and ethical issues for both business and government,’ said Pat Semenya, head of ACCA South Africa.

‘There was a decrease in the overall size of South Africa’s shadow economy’s share of GDP since 2011; a positive sign that efforts to curb its impact have been implemented in recent years. But that’s the end of the good news as the future trend is profoundly opposite,’ Semenya continues.

South Africa’s current shadow economy level is higher than the global average. Despite increasing access to education and training via private sector provision, global inequality (whilst not increasing) and unemployment are still very high, showcasing the need for more effective strategies to tackle it.’ 

Faye Chua, Head of Business Insights at ACCA says,

The shadow economy presents an enormous challenge for society and a huge potential opportunity for the profession to play an active role across the entire value chain from measurement and monitoring through to helping shadow firms and individuals manage their financial affairs and possibly make the transition from informal to formal.

‘Effective management of the shadow economy requires action at all levels – government, cities, local communities and individuals.

For more information, see http://www.accaglobal.com/gb/en/professional-insights/global-economics/Emerging-from-the-shadows.html  

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com

 

 

 

 

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