The South African Government has yet another problem to deal with after being added to the greylist by the FATF (Financial Action Task Force) due to their inability to manage the money laundering and terrorism problems.
Grey Listing and the FATF
The Greylist is a list of countries that are put on a watchlist for their inactivity or lack of activity in fighting against money laundering and terrorism.
This list currently includes countries like Panama and Cayman Islands as these countries are
known as tax havens.
It also includes countries that are globally known as war zones, these include Syria, Yemen,
Mail, Nigeria, Mozambique, and Congo.
Impact on South African economy
The grey listing could limit the investments that come into South Africa for various reasons, these are reasons such as the vetting process investors will have to go through could be longer than before. This is due to the fact that the officials responsible for this will be looking to ensure that
this issue isn’t worsened in any way or form.
Reputation is everything in a space where people need to trust you/your country with their capital, and South Africa’s reputation seems to be scarred from this.
The cost of living for South African residence could also increase due to the struggles that the countries are facing that keep on piling. The Rand reportedly weakened by as much as 1.2%
against the dollar following the report of these news.
This is also likely to cause more capital and currency outflow as many people are panicking, and this could to people looking to take their investments elsewhere before their investments are
worth lesser than they already are.
The plan of approach seems to be something that the South African government is not taking lightly as they hope for the decision to be re-evaluated in June 2023, which is a few months from now. They are also looking to take some notes from the handbook of the Mauritius government
as they managed to get removed from this list.
The South African government has been given until January 2025 to rid their countries off these problems. There is a belief that the problems started during the 9 year reign of South Africa’s former president, Jacob Zuma. This reign is believed to have been rid with corruption as he is
still under investigation for misusing of state funds.
Overview
This is an extremely difficult trine for the ANC (African National Congress) as they are the leading party. There is a lot of damages that have went unanswered over the past few years and the citizens of the country are only growing weary of the government’s competence.
There has been extreme load shedding for the past sic months, and it doesn’t seem like something that is going to stop anytime soon. The elections will be held in 2024, and the ANC party might
need a miracle to stay in power post the elections.
