Talking Drugs
February 17, 2025
The illicit drug market is one of the most resilient sectors of the global underground economy. A study in the Journal of Illicit Economies and Development, published last year, casts light on the South African market for unregulated drugs – particularly cocaine, heroin, and methamphetamine. Titled “Insights into the Value of the Market for Cocaine, Heroin and Methamphetamine in South Africa,” the paper investigates the economics of these illicit markets, which were collectively valued at approximately $3.5 billion in 2020. This accounts for about 1% of South Africa’s GDP – a sign that illegal drug markets persist and grow despite the efforts of law enforcement.
Understanding South Africa’s drug market landscape
In recent years, South Africa has seen a notable increase in drug availability, and drug consumption has also gone up sharply; heroin, cocaine, and methamphetamine are widely available in both urban and rural areas.
This context also highlights how South Africa has developed into a key transit and consumption country in the global narcotics trade. However, reliable data about market size or user demography is difficult to attain. To fill this gap in the research, the study’s authors (Andrew Scheibe, Shaun Shelly, and MJ Stowe) collaborated with local communities, including people who use drugs, to collect field data and estimate market dynamics.
They uncovered detailed information on usage patterns, prices, and places of purchase through a series of focus groups, interviews, and mapping activities in nine of the country’s largest cities.
The economics of drug consumption
In order to arrive at the total market value, the researchers estimated the number of daily and infrequent users of drugs and calculated the volumes consumed. The study estimated that 400,000 people use heroin, consuming approximately 146 tons annually; 350,000 people use cocaine, consuming approximately 18.77 tons annually; and 290,000 people use methamphetamine, consuming approximately 60.19 tons annually. Multiplying these figures with the prices of each drug, the researchers calculated a combined annual market value of approximately $3.5 billion.
These estimates have wide margins of error due to uncertainties about the number of users and quantities consumed. However, they do take into account regional differences in cost. For instance, heroin is available at $10 a gram on average in Cape Town, but costs $16 in less accessible areas. The prices of methamphetamine similarly vary, costing between $5 and $13 per gram depending on location.
Methodological innovations and limitations
The study adopted an innovative data collection method by involving people who use drugs in the design and implementation of the research. These participatory methods reduced biases associated with standard surveys, where underreporting of drug use is usually found due to stigma and criminalisation. The Delphi method, a consensus-building technique, was used by the researchers to engage with drug-related experts to establish probable ranges of approximate sizes and consumption rates of drug-using population.
However, various challenges still persisted for the study’s execution. The COVID-19 pandemic significantly constrained fieldwork, and workshops were held virtually. This limited the reach of the study and introduced accessibility issues for some respondents. Poorly represented regions included affluent areas, probably leading to conservative market valuations. There is a need for future studies with increased samples, including people who sell drugs and more affluent users.
Extrapolation to areas not covered by the fieldwork was based on the input of people who use drugs and other informants. These assumptions may have resulted in underestimation or overestimation of actual consumption.
Implications for drug policy and harm reduction
The study highlights the resilience of illicit drug markets despite intensive policing and legal interventions. This implies a substantial market demand that prohibitionist policies have not been able to suppress.
The data also shows an urgent need for policy reform. Instead of focusing on supply reduction, the response to using illicit drugs should focus on harm reduction, public health, and community support. The research underscores the magnitude of the problem and the potential implications for health and development if efficient policies and interventions are not implemented with urgency.
This pioneering study in South Africa underlines the often-ignored yet critical role of people who use drugs in understanding drug economies; it also highlights a need for further investigation of the social and economic factors that sustain these markets.
The full article is available here in the Journal of Illicit Economies and Development.
