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News24
07-05-2025
- Business
- News24
SA faces rising trend of fake drugs as law enforcement battles to curb illicit sales
An independent report on illicit trade has found that counterfeit medication to deal with issues like weight loss has been on the rise in SA. While such medication poses a risk to consumer health, the report notes that laws in SA cannot deal with the problem effectively. According to the Tracit, SA ranks 60th out of 158 countries in effectiveness in combating illicit trade, costing the country an estimated 10% of its GDP. For more financial news, go to the News24 Business front page. The sale of counterfeit pharmaceutical products from online platforms and vendors has been growing in popularity as more SA consumers try to source cheaper versions of scheduled medications such as Ozempic, a medication for diabetes that is also widely used for weight loss. The trend has taken root as regulatory gaps make it difficult for law enforcement to stop illegal sales, according to an independent report from the Transnational Alliance to Combat Illicit Trade (Tracit), which was released this week with Business Unity South Africa (BUSA). Tracit is an independent NPO that aims to combat illicit trade globally. The report, titled SA's fight against illicit trade: A strategic view, found that SA's current regulations were not equipped to hold third-party platforms accountable. Illicit sales also posed a risk to consumers' health and safety, including strokes and high blood pressure, the report said. According to the Tracit report, the popularity of counterfeit medication and pharmaceutical products, both online and in the informal economy, were driven by factors including weak trade enforcement at borders, more consumers seeking cheaper alternatives, a lack of public awareness around counterfeit goods, and a lack of capacity for the courts and law enforcement to hold guilty parties and companies accountable. Although South Africa's pharmaceutical regulatory framework meets international standards, a lack of a strategic framework and clear enforcement responsibilities leaves the system vulnerable to counterfeit infiltration. Efforts to mitigate these risks must focus on strengthening enforcement mechanisms, modernising regulations, and closing gaps in the pharmaceutical value chain to protect public health and safety. SA's fight against illicit trade: A strategic review Health bodies such as the South African Health Products Regulatory Authority (SAHPRA) had already raised the alarm over counterfeit Ozempic-like medication or Glucagon-like Peptide-1 (GLP-1) products last year, the report said. Online platform weaknesses The report also found that the growth in online platforms had led to more hotspots for the illicit trade of vapes and cigarettes. Looking at SA's online platforms, Tracit said: 'Key deficiencies [relating to online platforms in SA] include inadequate regulations establishing platform liability for third-party illicit sales, insufficient transparency measures such as seller verification, limited proactive risk management by online marketplaces, and weak consumer recourse mechanisms […] 'Existing frameworks, including the Medicines and Related Substances Act, have not sufficiently evolved to address digital commerce, resulting in critical vulnerabilities.' Tracit found that SA had been particularly vulnerable to illicit trade, ranking 60th out of 158 countries on its 2025 Illicit Trade Index. Among the top performers on the index, which indicates how capable countries are able to fight illicit trade, are Denmark, followed by the US, Finland, and Germany. While SA scored above the global average and landed at 52.4 out of 100 in Africa, the index found that supply chain weaknesses, corruption, and the prevalence of illicit trade in cigarettes, alcohol and pharmaceutical products had hampered its ability to achieve a higher score. The report also found deficiencies in SA's postal and parcel delivery service systems, saying that better regulations were needed to combat smuggling through international and domestic mailing systems. Speaking at the report's launch, Tracit director Esteban Guidici said that modern illicit trade was often facilitated through small parcels. Guidici said reports from the Consumer Goods Council found that SA lost 10% of its GDP every year due to counterfeit goods and illicit trade. '[Like all countries], South Africa is grappling with national post [offices] and private couriers. It is flooded with them, and all the illicit goods are inside because of a lack of controls. When it comes to pharmaceutical products, [these are] often sent through small parcels to avoid detection.' Meanwhile, other recommendations from Tracit included establishing a public-private Interagency Anti-Illicit Trade Coordinator with BUSA and BLSA, to combat illicit trade locally, including a Pharma Crime team. The coordinator, which will form part of the national government, would aim to raise awareness of illicit trade, provide financial resources to law enforcement, and enforce more aggressive anti-illicit trade regulations.
Yahoo
18-02-2025
- Business
- Yahoo
South Africa set for last-ditch bid to save relations with Trump
South Africa is preparing to dispatch a delegation of government and business leaders to Washington in an attempt to retain the country's preferential access to the world's largest economy — but only after similar trips to China and Europe. The urgent diplomatic maneuvering is part of a broader push to improve relations with the Trump administration. Last week, four congressmen in Washington led calls for South Africa to be excluded from the African Growth and Opportunity Act (AGOA), a trade platform that allows thousands of products from eligible sub-Saharan countries to enter the US market duty-free. Such a move, which analysts say looks increasingly likely, would deal a huge blow to South African firms ranging from car manufacturers to fruit exporters. South African President Cyril Ramaphosa met with business groups last week to discuss how to dial down tensions with Washington, two business leaders who took part in the talks told Semafor, speaking on condition of anonymity because they are not authorized to talk to the media on the matter. Khulekani Mathe, CEO of the Business Unity organization that represents South African companies, said his members are 'concerned' about the country's relations with its second-largest trading partner after China. 'We have not been in this position before and things are significantly bad compared to past instances,' he said. Pretoria fears South Africa is vulnerable to 'humiliation' if it sends a delegation straight to Washington without first going to China and Europe to garner support, the two business leaders told Semafor, saying it wants to strengthen its image as a government that enjoys the support of powerhouses elsewhere. The exact dates for the trips are not yet clear. A spokesperson for South Africa's government did not immediately respond to a request for comment. South African Foreign Minister Ronald Lamola has also said the government plans to set up bilateral meetings with China and a number of other countries. '(China said) that they are there in solidarity with us, and they stand ready to pledge support in terms of whatever trade relations and challenges that they can,' he told Reuters this week. The duty-free access to the US provided by AGOA has benefited a number of sectors, particularly South Africa's automobile industry. Motor vehicles make up around a fifth of South Africa's exports to the US and are worth an estimated $1.9 billion, putting them only behind precious metals. Whereas the subsidies in South Africa's automobile industry could cushion the blow of losing AGOA status, fruit and nut exporters — other big beneficiaries — would be hit particularly hard, say analysts. 'Losing AGOA would affect the competitiveness of South African products as they would have an average 3% added to their price,' Wandile Sihlobo, chief economist at the Agriculture Business Chamber of South Africa, told Semafor. US President Donald Trump signed an executive order on Feb. 7 freezing funding to South Africa over its new land expropriation law, claiming it targeted land owned by farmers from South Africa's white minority Afrikaner group. Pretoria has denied the allegations, stressing that no land has been seized under the law that seeks to redress the legacy of apartheid rule: White South Africans own around 70% of private land despite making up only 7% of the population. South Africa is in a difficult situation as it seeks to avert the worst of Trump's wrath. Losing AGOA would dent the country's efforts to attract long-term foreign direct investment, and it would need to move rapidly to find replacement markets for its goods and services. The shift could cost tens of thousands of jobs and dent the government's economic growth strategy. AGOA has become a strategic asset South Africa does not want to lose, as the symbolism of its exit would create chaos for exporters in sectors like agriculture. But the biggest pain would come from US tariffs and sanctions, which Trump could capriciously introduce. The move to solidify ties with Beijing and Europe seems wise, given the speed with which the Trump administration could move against South Africa. The US has made clear its disdain for Pretoria's position on issues ranging from land laws to its position on Israel. The danger is that speaking to Beijing before Washington could be read as a sign of disrespect by Trump, deepening his irritation. 'I don't believe grovelling before President Trump will accomplish anything,' said Donald Mckay, CEO of Johannesburg-based research house XA Global Trade Advisors. 'Trump seems determined to punish South Africa for things we mostly haven't done,' said McKay, arguing that South Africa should instead initiate an exit from AGOA. 'The decision our politicians need to make is if we are better off waiting for the axe to fall or whether we should choose the time and terms of our exit,' he said. South Africa should radically 'rethink' its relationship with the US because relations between the two countries are now in uncharted territory, argues the Institute for Security Studies think tank. Pretoria could turn to Russia or Iran to expand its nuclear power capacity, an approach analysts say could deepen South Africa's rift with Washington.
