FATF lifts South Africa from grey list: What it means for the economy
SA was finally removed from the grey list, more than two years after it was flagged for deficiencies in combating money laundering and terrorist financing.
Image: FILE
Christmas came early for South Africa as the Financial Action Task Force (FATF) finally removed the country from its grey list.
SA was placed on the list in February 2023 after the FATF pointed out weaknesses in its laws and systems to fight money laundering and terrorism financing.
After more than two years of reforms, legal updates, and tighter financial controls, SA has met the FATF’s requirements.
The FATF said SA has improved its systems to stop money laundering and terrorist financing.
Nigeria, Mozambique, and Burkina Faso have also been removed from the list.
The news was announced at a plenary press briefing on Friday, where FATF president Elisa de Anda Madrazo described the move as “a very positive story for the continent of Africa".
The briefing followed the FATF’s plenary session with member countries in Paris.
This session is the organisation’s main decision-making meeting, where compliance is reviewed, risks are assessed, and updates to the grey and black lists are decided.
At this week’s meeting, SA’s progress on anti-money laundering and counter-terrorist financing measures was evaluated.
Economist Dawie Roodt told IOL the news has come as a welcome shot in the arm for the economy.
He said it has brightened the outlook for investors and could make doing business with SA much easier.
"This is absolutely brilliant news," he said on Friday night.
"It means that from now on it will be much easier to do business internationally.
"I know this because we move money around internationally, and it has been extremely difficult to do business or even open a bank account while we were on the grey list.
"Now things are going to be much easier.
"That means transaction costs will be lower, making it easier for South Africans to move money internationally."
Prof Raymond Parsons of NWU Business School agrees.
‘It is a positive development for the SA economy. While the financial markets will already have priced in the prospect that the FATF will make the decision, it means that SA has quite quickly taken the necessary steps to achieve this outcome. Being off the ‘grey list’ will help to improve investor confidence and reduce costs associated with banking transactions. It demonstrates that SA has made progress in dealing with money laundering and terror financing. It signals that SA is achieving some of its necessary key reforms."
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