South Africa’s bid to escape the Financial Action Task Force (FATF) grey list—a label that marks nations with weak anti-money laundering controls—has hit a major snag. After months of optimism and reform, new corruption scandals threaten to undermine the country’s progress and dent global confidence in its financial integrity.
The country had been on course to celebrate a significant economic milestone this October, with experts predicting that South Africa would finally be removed from the FATF grey list. That optimism, however, is now hanging by a thread.
According to Stanlib Chief Economist Kevin Lings, South Africa had made real progress since being grey-listed in February 2023. “It’s a distinct possibility. We were put on the grey list in February 2023 and have been systematically addressing the 22 issues FATF identified since then,” said Lings, referring to the nation’s expected delisting at the FATF plenary meeting scheduled for October 24.
The FATF had acknowledged in June 2024 that South Africa had made “substantial progress” in tightening anti-money laundering frameworks and improving the oversight of financial institutions. A successful on-site inspection by FATF officials in July further raised hopes that South Africa’s financial reputation would soon be restored.
Then came the plot twist.
A newly launched commission of inquiry into the South African Police Service uncovered yet another round of corruption and maladministration—precisely the sort of weaknesses that led to the grey-listing in the first place.
“There’s a twist to the story,” Lings remarked. “The latest commission has revealed additional significant issues relating to corruption and maladministration. This is exactly the type of thing FATF flagged as inadequate when we were first grey-listed.”
These findings could not have come at a worse time. Economists now fear that the FATF may delay South Africa’s removal from the list, pending proof that real corrective measures follow the latest revelations.
“There’s a risk they look at this and say, ‘Let’s hold off and see how South Africa responds to these findings.’ They’ll want assurance that real action follows, not just another report that gathers dust,” Lings cautioned, as quoted by The Africa Report.
Remaining on the grey list has real-world consequences. It increases banking transaction costs, slows cross-border trade, and deters much-needed foreign investment. For a country already grappling with sluggish growth, persistent unemployment, and a fragile currency, this latest setback could not be more ill-timed.
Economists warn that if South Africa cannot demonstrate decisive follow-through on anti-corruption measures, it risks undoing two years of painstaking reform and damaging its credibility with global regulators. The FATF, after all, doesn’t take kindly to half-measures—or to promises that fade faster than a scandal’s news cycle.
As the FATF plenary meeting draws closer, all eyes will be on how swiftly the government responds to these fresh findings. The difference between progress and paralysis could come down to whether South Africa can prove that reform is more than just paperwork—it’s political will in action.
