SA’s grey list exit hangs in the balance amid progress and fresh corruption concerns

Kevin Lings, Chief Economist at Stanlib, unpacks South Africa’s potential exit from the Financial Action Task Force grey list. He outlines the substantial progress made, the economic impact of being greylisted, and a new twist involving corruption revelations that could delay removal. The discussion highlights implications for foreign investment, international reputation, and future economic growth..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter .South Africa’s potential removal from the Financial Action Task Force (FATF) grey list has become a hot topic as the global body prepares for its upcoming plenary meeting on 24 October. In an insightful conversation with Bronwyn Nielsen of BizNews, Kevin Lings, Chief Economist at Stanlib, unpacked both the optimism and the uncertainty surrounding the country’s position.South Africa was officially placed on the grey list in February 2023 after failing to adequately address a number of deficiencies in its financial regulatory and anti-money laundering frameworks. Prior to that, the country had been under warning and was granted time to rectify key shortcomings. According to Lings, while progress was made during that period, it fell short of FATF’s requirements, resulting in greylisting.Over the last two and a half years, however, South Africa has taken significant steps to comply with the FATF’s directives. Of the 22 points of concern raised by the organisation, substantial progress has been made on nearly all fronts. In June 2025, FATF acknowledged this by noting that the country had “mostly completed” the necessary actions. A site visit in July followed, during which a FATF delegation reviewed South Africa’s on-the-ground efforts. The National Treasury later confirmed that the visit had gone well, fuelling hopes that the greylisting might soon come to an end.As Lings explained, being on the grey list has had tangible consequences for South Africa. “It added a significant layer of cost to doing business,” he noted, particularly for a small open economy where more than half of GDP is tied to imports and exports. Increased paperwork, extended processing times, and heightened compliance demands have weighed heavily on businesses - especially within the financial sector. Additionally, the greylist designation has deterred foreign direct investment (FDI), as global investors typically avoid countries seen as high-risk or poorly regulated.“For a G20 country to be on the grey list is an embarrassment,” Lings remarked, highlighting that South Africa has, by association, been grouped with nations such as Syria, Nigeria, and South Sudan. The reputational damage alone has impacted portfolio flows into the bond and equity markets, further weakening economic performance.However, just as optimism was building, a new complication has emerged. A recent commission of inquiry into South Africa’s policing system has uncovered fresh instances of corruption and maladministration - issues that echo the governance failures previously highlighted during the state capture investigations. These developments may give FATF pause.Lings warned that although South Africa does not need to resolve every corruption case to satisfy FATF requirements, it must demonstrate credible and ongoing efforts to investigate and prosecute misconduct. “They clearly want to know that you're making progress in that direction,” he said. Failure to act decisively on new revelations could signal to FATF that the country lacks the political will or institutional capacity to maintain compliance.What’s more, Lings cautioned that even if South Africa is removed from the grey list, complacency could result in a swift return. “Could we come off the grey list and find ourselves back on it? That's not impossible,” he stated. The priority, he argued, must be to ensure continued reform and accountability.Despite the uncertainty, Lings believes that exiting the grey list would be a meaningful step forward for South Africa. It could restore investor confidence, reduce the cost of international transactions, and enhance the country’s global standing - especially at a time when government is seeking to reinvigorate growth and service delivery.Ultimately, the FATF’s decision on 24 October will reflect not only past progress, but confidence in South Africa’s commitment to ongoing reform. While the outcome remains uncertain, one thing is clear: the stakes for the country’s economy and reputation could not be higher.

SA’s grey list exit hangs in the balance amid progress and fresh corruption concerns

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