Some analysts remain cautiously optimistic SA will finally exit greylist

Some analysts are cautiously optimistic that South Africa will finally exit the greylist when the Financial Action Task Force (FATF) wraps up its latest plenary and working group meetings in Paris on Friday.

South Africa was added to the list in February 2023 for failing to have enough measures in place to prevent money laundering and terror financing.

In July this year, government announced it had since completed the 22 action items imposed by the global financial watchdog to tighten its anti-corruption systems.

Greylisted countries are subject to increased scrutiny, which runs the risk of spooking domestic and international investors.

In the two years on the greylist, SA's investment and trade prospects are said to have been severely dented.

READ: After FATF visit, SA govt awaits decision on removal from greylist

To address the FATF's concerns, amendments to existing legislation and the introduction of new legislation have been made, including stricter requirements for companies and trusts to record and report information regarding their beneficial owners.

While FATF decisions are complex and require sustained demonstration of effectiveness, not just technical compliance, director at Citadel Global Bianca Botes said the likelihood of South Africa's delisting from the grelylist appears substantial but not guaranteed.

"FATF delisting requires meeting stringent criteria, including demonstrating sustained effectiveness over time, not just technical compliance. The October Plenary will assess whether reforms are embedded in practice. While the fundamentals are positive, FATF decisions involve complex political and technical considerations and the organisation typically exercises caution before removing countries from enhanced monitoring."

If SA succeeds in being removed from the greylist, Botes said this will restore faith in government’s ability to coordinate complex multi-agency reforms and prove that it' institutional capabilities.