In a significant development for the nation’s financial standing, the Financial Action Task Force (FATF) has removed South Africa from its “grey list,” a move hailed by the local business community. The global money laundering and terrorist financing watchdog announced it is satisfied that the country has successfully addressed all 22 action items required to tighten its financial controls and crack down on illicit money flows.
The delisting marks a major milestone for South Africa, which had been under increased monitoring due to strategic deficiencies in its anti-money laundering and counter-terrorist financing regimes.
Economist and Firstsource Money Executive Director, Redge Nkosi, welcomed the decision, stating it signifies a restoration of international confidence. “Having been removed from that list, it does show therefore that a country will perhaps be a bit respected and confidence will certainly flow among those who deal with South Africa internally and externally,” Nkosi said. “It’s a very positive development.”
However, Nkosi tempered expectations for an immediate economic windfall. While the move improves sentiment, he cautioned against anticipating a direct and substantial surge in capital inflows or a rapid acceleration of economic growth. He pointed to a muted reaction in the bond markets as an indicator that the delisting had largely been anticipated by investors.
“The flows of money that come in are not directly related to South Africa being on the grey list or not,” Nkosi explained. “I don’t think there’s so much tangible evidence that we can see in terms of money having to flow as a consequence of that.”
The path to delisting was achieved in record time, which Nkosi cited as a testament to South Africa’s institutional capacity when there is political will to reform. He attributed the original greylisting partly to the era of “state capture,” which he characterized as a “slip-up” for the nation’s otherwise robust institutions.
Looking ahead, Nkosi emphasized that sustained vigilance from both the public and private sectors is crucial to prevent a relapse. He called for continuous monitoring and cooperation to ensure that governance and risk management remain top priorities.
“For ordinary South Africans, especially small businesses and entrepreneurs engaged in cross-border trade, the exit means a freer flow of funds in and out of the country, which should boost economic activity,” Nkosi noted.
South Africa’s delisting coincides with similar progress in other African nations, including Nigeria and Mozambique. Nkosi stated this regional progress indicates a broader, more active integration of the continent with the global financial system, which bodes well for future economic engagement.
With the next FATF mutual evaluation scheduled for 2026, Nkosi expressed confidence in the resilience of South Africa’s financial system, highlighting that institutions like the National Treasury, the South African Reserve Bank, and the private sector are well-positioned to collaborate and ensure the country not only remains off the list but continues to strengthen its financial integrity.
