South Africa’s Grey Listing on Dirty-Money Watchlist

South Africa’s Grey Listing on Dirty-Money Watchlist

South Africa’s Grey Listing on Dirty-Money Watchlist Won’t Immediately Impact Credit Ratings, Says Deputy Central Bank Governor. 

South Africa’s recent inclusion on the Financial Action Task Force’s (FATF) grey list, which highlights concerns over illicit financial flows and terrorism financing, is not expected to have an immediate impact on the nation’s credit ratings, according to Fundi Tshazibana, Deputy Governor of the South African Reserve Bank. 

The FATF, based in Paris, placed South Africa on the grey list in February due to identified deficiencies in addressing these critical issues. To rectify the situation, the country has been given until January 31, 2025, to enhance corruption investigations and prosecutions and ensure timely access to accurate and up-to-date beneficial ownership information. 

Tshazibana clarified that ratings agencies are currently adopting a neutral stance because being on the grey list means South Africa is subject to enhanced monitoring and can still take necessary corrective actions. The real concern arises if the country fails to meet the deadline, as it may indicate a lack of commitment to following through on its promises. 

South Africa’s creditworthiness has faced challenges, with major ratings agencies assigning their lowest assessments since the country received credit ratings in 1994. Moody’s Investors Service has placed South Africa two steps below investment grade, while S&P Global Ratings and Fitch Ratings both rank it three notches below. However, all three agencies maintain a stable outlook for the country. 

This action by the FATF follows a period of widespread corruption and dirty money laundering, commonly referred to as “state capture,” during the rule of former President Jacob Zuma. Current President Cyril Ramaphosa estimates that at least 500 billion rand ($27 billion) of taxpayer funds were misappropriated, while Zuma denies any wrongdoing. 

South Africa now faces the task of addressing these deficiencies within the given timeframe to restore its reputation and strengthen its position on the global financial stage. The nation’s commitment to combating illicit financial activities and terrorism financing is crucial for restoring investor confidence and fostering sustainable economic growth. 


Written by:

Daniel Wilkes | Associate at TenIntelligence