Money laundering in Southern Africa

This research paper by the Institute for Security Studies examines the incidence, magnitude, and control of money laundering in Southern Africa. It analyzes predicate crimes—primarily drug trafficking and corruption—the role of informal remittance systems, and the legislative and institutional challenges facing the Southern African Development Community (SADC) region in implementing anti-money laundering frameworks.

• Drug trafficking is the most prominent predicate activity for money laundering across Southern Africa. In South Africa, the market is the largest in the sub-region, with over 100 known syndicates laundering profits through residential properties, legitimate businesses, and motor vehicles. In Zambia, the Anti-Money Laundering Unit identifies drug trafficking as likely the primary source of illicit proceeds.
• Corruption serves as both a source of laundered funds and a means to facilitate the laundering process by compromising law enforcement and financial institutions. High-profile cases of 'grand corruption' involving leaders in the DRC, Malawi, and Nigeria are noted, with recent evidence showing proceeds from Angola and the DRC being invested in high-end residential property in South Africa's Sandton and Cape Town areas.
• Human trafficking is considered the third most problematic syndicated crime in Southern Africa, following drug trafficking and motor vehicle theft. A 2003 IOM study identified ten source countries (Angola, Botswana, DRC, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia, and Zimbabwe) and seven transit countries, with South Africa serving as both a source and a destination.
• Informal fund transfer systems, such as the hawala, are attractive due to cost-effectiveness, efficiency, reliability, lack of bureaucracy, and the ability to evade taxes. While empirical data is limited, there are indications of such systems operating in South Africa, Tanzania, Malawi, Zimbabwe, Kenya, and Uganda.
• There is a regional divide between fragmented and integrated law enforcement models. While the international trend favors integrated Financial Intelligence Units (FIUs), only Mauritius and South Africa have fully implemented this. Many governments in the region, including those in Angola, the DRC, Malawi, Namibia, Swaziland, Tanzania, Zambia, and Zimbabwe, are reluctant to create autonomous agencies that might threaten political and business elites.
• Legislative progress against money laundering is uneven across the SADC. As of 2004, six SADC member states lacked laws against money laundering. While 12 of 14 member states committed to measures via the ESAAMLG, Angola and the DRC were the exceptions.
• The effectiveness of anti-money laundering measures is hindered by low bank usage in certain countries, most notably Tanzania, where the rate of use by the economically active population is the lowest in the region. Conversely, Mauritius has achieved high bank usage by combining anti-crime efforts with social security support programmes.

APA

Goredema, C. (2004). Money laundering in Southern Africa. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/92.PDF

Chicago

Goredema, Charles. Money laundering in Southern Africa. Institute for Security Studies, 2004. https://issafrica.s3.amazonaws.com/site/uploads/92.PDF.

Wikipedia

{{cite report |last1=Goredema |first1=Charles |title=Money laundering in Southern Africa |publisher=Institute for Security Studies |date=October 2004 |url=https://issafrica.s3.amazonaws.com/site/uploads/92.PDF |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{goredema2004money, author = {Goredema, Charles}, title = {{Money laundering in Southern Africa}}, institution = {Institute for Security Studies}, year = {2004}, month = oct, url = {https://issafrica.s3.amazonaws.com/site/uploads/92.PDF}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }