Forty-five companies in the clothing and textile sector are being investigated or prosecuted for job-sapping customs fraud, Ebrahim Patel, the minister of economic planning, told Parliament on Thursday in a report on the country's response to the global economic crisis.

Calling the crunch "the most serious economic challenge in 80 years", he said it had destroyed close to half a million jobs in the first six months of the year and threatened to permanently undermine the country's productive capacity and its ability to respond when the global economy turns positive.

Patel said the government, business and labour had started work on six of 12 agreed programmes to defend the economy, including increases in the prosecution of customs fraud and of anti-competitive behaviour.

Patel, who has previously been critical of the defence put up by the South African Revenue Service of embattled local industry, said yesterday: "Sars has now reported significant progress in respect of investigations and the confiscation of goods."

Citing the example of the clothing and textile sector, in which he worked as a unionist before joining President Jacob Zuma's cabinet, Patel said the Competition Commission had significantly accelerated the investigation of collusion to keep food prices high, with seven sectors currently in the spotlight. They include bread, milling, dairy products, poultry, fertiliser and fats and oils.

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