SA's greylisting will impact business climate - economist
North West University Business School’s professor Raymond Parsons says although the greylisting of South Africa by the Financial Action Task Force (FATF) did not come as a surprise, it is something the country's vulnerable economy can do without.
Parsons was commenting on the announcement of South Africa being greylisted due to the government’s failure to proclaim and enforce the anti-money laundering and terrorism-funding regulations.
The global watchdog published an updated list on Friday.
Being greylisted is not a label SA’s "preferred investment destination" aspirations need, says Parsons.
“The remedial legislative and other efforts by South Africa so far to avert this outcome have clearly fallen far short of what the FATF expected. Financial crime and money laundering will need to be tackled by South Africa much more vigorously soon, bearing in mind that the original 2021 FATF timeline was one year.
“Greylisting should therefore be high on the agenda of the expected reshuffled Cabinet, particularly at the criminal justice level, as SA has apparently now made ‘a high-level political commitment’ to work with the FATF to continue to fight money laundering.”
Parsons adds that more effort needs to be put to scrap out money laundering, corruption and financial crime and to provide demonstrable evidence.
“While greylisting remains part of the elevated risks to SA’s economic outlook, it should, however, have a minimal impact on SA’s immediate economic performance, as other stronger forces are presently driving the economy. And the GDP growth forecasts in the recent Budget and by the SARB over the next three years have already been substantially cut, bearing these various elevated risks in mind.”
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