SA's survival of grey list positive for SA's economy, say economists

Some economists and business groups have hailed South Africa’s exit from the grey list as good news for the economy.

The Financial Action Task Force (FATF) delisted South Africa from the notorious greylist on Friday, after more than two years of intense scrutiny by the global financial crime watchdog.

The country was slapped with the unwanted tag for not complying with international standards around preventing money laundering and terrorist financing.

On Friday, the FATF made the latest decision on the last day of its plenary and working group meetings in Paris. Burkina Faso, Mozambique and Nigeria were also removed from the grey list.

Greylisting subjects countries to enhanced scrutiny, increasing transaction costs, lengthening payment processing times and raising compliance barriers for international banks dealing with South African entities.

Experts at Citadel Global previously described delisting as a signal that South Africa is committed to maintaining robust financial standards and is a credible and attractive destination for domestic and international investment.

While the markets will have already priced in the prospect that the FATF would make the decision, North West University (NWU) Business School economist Raymond Parsons said the decision nonetheless marks South Africa crossing a key threshold in financial reform.

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He further said being off the grey list also eliminates one important element of policy uncertainty that is keeping the NWU Business School’s policy uncertainty index in negative territory.

Within the framework of the government business partnership, Business for South Africa said the crime and corruption focal area continues to support efforts to keep South Africa off the grey list at the next FATF mutual evaluation in 2026.

This work includes initiatives to strengthen the criminal justice system’s capacity to investigate and prosecute complex financial crimes.

“This is an excellent outcome for South Africa. The initiatives underway to tackle crime and corruption are not only crucial for unlocking investment in the country, but are also meaningful to the lives of ordinary South Africans.

“There is more work to be done but what has been achieved so far again demonstrates the benefits that can be unlocked when the private and public sectors work together in the national interest,” explained Neal Froneman, the chairman of Business Against Crime South Africa (BACSA), who, together with Mary Vilakazi and Jannie Durand, champions the Partnership’s Crime and Corruption focal area.

“South Africa’s removal from the grey list will help reduce transaction costs, enhance investor confidence, and improve the ease of doing business, particularly in the financial sector. It sends a clear signal to international partners that South Africa is committed to transparency, accountability, and global best practice.”