Polity.org.za Audio Articles

Mixed political reactions to S Africa's exit from FATF grey list

Parliament's Standing Committee on Appropriations has described South Africa's exit from the Financial Action Task Force (FATF) grey list as a major milestone and a strong vote of confidence in the country's ability to combat money laundering and other illicit financial crimes, with the Democratic Alliance (DA) calling for policy focus to improve debt ratings, reduce red tape and improve how government spends money.

Last week, the FATF announced that South Africa has exited the FATF grey list, formally called the list of "Jurisdictions under Increased Monitoring".

This followed the conclusion of meetings of the FATF Plenary that took place in Paris, France, last week.

South Africa was placed on the grey list in February 2023 and was required to implement 22 action plans to strengthen its systems for fighting money laundering and terrorism financing.

The FATF announced that South Africa, Nigeria, and Mozambique had successfully addressed the shortcomings that led to their grey listing.

National Treasury explained that over the past 32 months, South Africa had engaged with a team of reviewers assigned by the FATF to assess progress against the Action Plan.

"This culminated in an on-site visit at the end of July 2025, when the assessors came to the country to confirm the sustainability of the reforms that had been reported to them. This concluded with a meeting with Deputy Minister of Finance Dr David Masondo, and Deputy Minister of Justice and Constitutional Development Andries Nel, who assured the FATF of the South African government's political commitment to continue to sustainably improve the country's Anti-Money Laundering and the Combating the Financing of Terrorism (AML/CFT) system," it said.

Committee chairperson Dr Mmusi Maimane welcomed South Africa's removal from the FATF grey list.

"...this milestone reflects the collective efforts of government, the private sector, and law enforcement agencies to strengthen our financial integrity systems," he said.

He noted that South Africa's removal from the grey list was expected to boost investor confidence and improve the country's economic outlook, as some foreign investments had been restricted due to the grey listing.

"Now, we must build on this progress by ensuring continued compliance with FATF standards through tangible outcomes including effective investigations, prosecutions, and sanctions against money laundering," stated Maimane.

He further congratulated Finance Minister Enoch Godongwana and the National Treasury team for their "leadership and professionalism" during the process, which resulted in a positive FATF assessment for South Africa.

DA spokesperson on Finance Dr Mark Burke commended the work, focus and commitment of government in getting South Africa off the grey list.

"Since entering government, we've helped work to secure this outcome. But there is no room for complacency.

"Now we must build momentum by ramping up successful prosecutions of financial crime. We want South Africa to be a hostile place for cartels, but a welcoming destination for reputable investors who bring jobs and growth," he stated.

Burke pointed out that prior to being grey listed, the DA had warned the African National Congress government that failing to tighten controls, improve reporting and boost capacity to deal with financial crimes would have serious consequences.

"We take no pleasure that our warnings materialised. We only hope that by continuing to advocate for strengthening controls, South Africa avoids a costly relapse," he said.

Meanwhile, the uMkhonto weSizwe Party (MKP) cautioned that the removal from the grey list did not automatically translate into greater investment or improved economic conditions for citizens.

MKP national spokesperson Nhlamulo Ndhlela said the South African economy remained "structurally unchanged, still plagued by unemployment, poverty and inequality".

"…while this development may be...

Moody's upbeat on Johannesburg's finances despite political woes

Johannesburg, South Africa's richest city and economic hub, received a vote of confidence from Moody's Ratings despite a record of political dysfunction and wasted spending that's prompted the national government to threaten to withdraw funding.

The city's credit ratings reflect "its sound operating performance, moderate debt levels, and a large, diversified local economy, supported by prudent financial management and close monitoring of budget execution and cash flow," Moody's analysts Irena Krizkovska and Marie Diron wrote after a review of the city's finances conducted last month.

"Over the years, the city has consistently maintained positive operating margins and moderate-to-low liquidity ratios," the analysts said, while acknowledging that Johannesburg faces pressures from infrastructure backlogs and a growing population that have led to rising debt levels.

The Moody's assessment - which didn't constitute a rating action - seems at odds with the view of South Africa's national government and business leaders. In August, Finance Minister Enoch Godongwana demanded an explanation for R24.4-billion of "unauthorised, irregular, fruitless and wasteful expenditure," and warned the city risks losing government funding unless the money is recouped.

And in September, business leaders said they've been discussing with the government whether they can help rescue Johannesburg from decay. The city, which is set to host Group of 20 heads of state next month, was R221-billion behind on maintenance and overdue upgrades needed for water, power and road infrastructure last year, council documents seen by Bloomberg showed.

Deteriorating water, power and roads infrastructure in Johannesburg has become a political flashpoint and a symbol of how unstable coalition governments are causing the decline of some of the country's biggest cities. The sprawling metropolis of 5-million people accounts for about 16% of South Africa's gross domestic product and is home to the country's main stock exchange and many of its biggest companies.

It's currently run by a coalition led by the African National Congress. The Democratic Alliance, the second-biggest party both nationally and in the municipal council, is seeking to take back the city in local government elections next year by highlighting its dysfunction.

Johannesburg has a long-term credit rating of Ba3 at Moody's, with a stable outlook. Although three levels below investment grade, that's higher than any other South African city except Cape Town, which is rated Ba2, on par with the national government.

'Boost for global standing' - Ramaphosa welcomes S Africa's grey list exit

President Cyril Ramaphosa said on Monday that government has committed more spending to counter money-laundering and terrorism financing, as he welcomed South Africa's exit from the Financial Action Task Force (FATF) grey list.

He wrote in his weekly letter to the nation that exiting the grey list demonstrated that government's anti-money laundering system was beginning to act against corruption and other financial crimes.

He said it laid the basis for further improvements.

"…it is a signal of our collective determination to ensure that the malfeasance of the past is well behind us," he said.

Last week, the FATF announced that South Africa had exited the FATF grey list, following the conclusion of meetings of the FATF Plenary that took place in Paris, France.

Ramaphosa said the exit boded well for the integrity and reputation of South Africa's financial system, its status as an investment destination and for the economy.

In 2023, South Africa was placed on its 'grey list' for falling short of certain international standards.

He said that just over two years since the FATF identified deficiencies that had rendered South Africa increasingly vulnerable to financial crimes, the dedication of a multidisciplinary team led by the National Treasury had culminated in formal exit from the grey list.

He said this was a boost for South Africa's international reputation and global standing.

"Grey listing results in a country being seen as risky for investors. The practical implications are that countries have greater difficulties obtaining credit and access to international financial services. There is reduced foreign direct investment and even capital outflows, and restrictions on cross-border transactions," he explained.

He explained that the impact of South Africa's exit from the FATF grey list would reduce pressure on citizens, businesses and the government.

"Ultimately, the return of international financial confidence and a reduced risk perception will attract more foreign direct investment. As our currency strengthens, the cost of living for citizens and doing business will improve," he added.

He noted that legislative amendments had been made to enable for more stringent reporting regulations around beneficial ownership.

"…this is so we know who ultimately owns, controls and benefits from a company, not just those who are listed as shareholders on paper.

"These changes will make it much more difficult for individuals and syndicates to funnel the proceeds of their corrupt activities through complex webs of shell companies, trusts and companies owned by friends and relatives," he explained.

Ramaphosa pointed out that to close high-risk loopholes around terrorism financing, government had introduced regulatory amendments to enable the investigation and prosecution of such cases.

He said government is steadily rebuilding institutions weakened by State capture, increased vigilance, not complacency.

He acknowledged that work still needs to be done to reduce and prevent financial crimes, and to ensure speedier investigations, prosecutions and convictions of those committing such crimes.

"With the necessary regulatory frameworks in place, our focus must now be on improving and strengthening implementation. We will also sustain enforcement within both public and private institutions and deepen international collaboration," he said.

Ramaphosa calls for new ventures with Vietnam, as he points to low investment

President Cyril Ramaphosa on Friday urged the Vietnamese to explore new ventures to diversify into untapped sectors and to build partnerships, thereby generating jobs, transferring skills and stimulating inclusive growth, as he noted low investment between South Africa and Vietnam.

Ramaphosa was speaking during a State visit to Vietnam, where he stated that there was no record of Vietnamese investments in South Africa.

He said there were several financial and non-financial support measures available for Vietnamese companies keen to invest in South Africa to diversify their supply chains.

"Our cooperation must extend into strategic sectors that define the economies of tomorrow. These sectors include electric vehicles, battery manufacturing, renewable energy, agro-processing and digital innovation," he said.

However, Ramaphosa noted that in recent years, trade between South Africa and Vietnam expanded significantly.

South Africa ran a sizable trade deficit with Vietnam, importing significantly more than it exported, he pointed out.

"…between 2023 and 2024 we had a trade deficit of 30%. South Africa largely exports raw commodities - minerals, ores, fuels and agricultural products - while Vietnam exports manufactured goods of higher value," he said.

He said the imbalance between the countries called for a move beyond the traditional trade in raw materials.

"…we need to work toward greater value addition, diversification and industrial collaboration," he said.

He said South Africa had much to offer Vietnam, in terms of mining, agriculture and manufacturing, while Vietnam, in turn, brought strengths in electronics, textiles, machinery and renewable-energy technologies.

"By combining South Africa's natural advantages with Vietnam's manufacturing dynamism, we can create industries that generate jobs, drive exports and strengthen both our nations' positions in the global economy," he said, describing the partnership as "untapped potential".

Africa and Asia could connect supply chains, enhance trade flows and create new pathways for investment, Ramaphosa argued.

"Together, we can build resilient food supply chains, foster technology transfer in agro-processing and expand our mutual exports into new markets.

"South Africa has demonstrated strengths in mining, automotive manufacturing and infrastructure development. These can complement Vietnam's strong base in electronics, textiles and industrial production," he said.

He explained that South Africa was advancing renewable-energy and green hydrogen projects, while Vietnam was also investing in sustainable energy infrastructure.

He said Vietnam could leverage South Africa's mineral wealth through investment and technology partnerships.

Lower CPI goal may save S Africa R900-billion in debt costs

Reserve Bank Governor Lesetja Kganyago emphasised the benefits of a lower inflation goal, saying it could save the government as much as R900-billion over a decade in debt-service costs.

"What we are showing by lowering the inflation target is that government will be able to save in debt servicing costs," Kganyago told an audience at the release of the bank's semi-annual Monetary Policy Review on Thursday in the capital, Pretoria. "Over a 10 year period, we estimate that to be about R900-billion. To take a straight line over 10 years, it's about R90-billion a year."

South Africa currently spends 22 cents of every rand on debt-service costs, crowding out investment in health and education.

Kganyago noted the debt-savings would dwarf the R60-billion the National Treasury expected to raise in the current fiscal year from a two-percentage-point value-added tax hike that was later scrapped after opposition from members of a coalition government, including the Democratic Alliance.

The governor announced in July that the central bank's monetary policy decisions will now be guided by aiming at the floor of its 3%-to-6% inflation target instead of its previous objective of the midpoint of that range.

The South African Reserve Bank has argued that the current inflation target, which has not been reviewed since it was first adopted in 2000, is too high and wide, and that striving for 3% would help lower borrowing costs and make the nation more competitive among its trading partners.

Since the July announcement, the yield on the South African benchmark 10-year bond has fallen 85 basis points to 8.95%, break-even rates, which show market expectations for inflation, have declined and the rand has strengthened nearly 4% against the dollar.

"Overall, the decline in long-term bond yields and inflation expectations suggests that markets see the 3% inflation objective as realistic and believe that it will help keep inflation steady," according to the MPR. "Further gains are likely to emerge from the formal adjustment of the inflation target."

A new inflation targeting framework is yet to be formally ratified by Finance Minister Enoch Godongwana, who is due to deliver an update on the nation's budget on November 12.

South Africa boosts deportations amid jobs crisis, Schreiber says

South Africa is pushing to deport more undocumented migrants who compete with citizens for jobs in an economy with one of the highest unemployment rates globally, the minister overseeing the programme said.

The nation "is a neglected part of the global migration story," with the contestation between foreigners and locals for positions becoming "a real tinderbox," Home Affairs Minister Leon Schreiber said in an interview on Bloomberg Television Friday. "We've deported 51 000 people in the last year - that's more than France and Germany combined. If we had more resources, we'd be doing more of that."

South Africa has the continent's most industrialised economy and sees a constant influx of job seekers from neighbouring countries, including Zimbabwe and Mozambique. But with the unemployment rate running at 33.2%, tensions between locals and foreigners run high. About 8.4-million people are eligible to work yet don't have jobs.

In 2008, about 60 people died and 50 000 were displaced in a wave of xenophobic violence, with foreigners blamed for everything from unemployment to poor government services.

There were similar riots in 2015 and again in 2019, when President Cyril Ramaphosa was forced to apologise to other African nations who were appalled by the treatment of their citizens. Local media recently reported on incidents of foreigners being chased away from health clinics by angry residents.

South Africa is managing the situation responsibly, said Schreiber, who is a member of the Democratic Alliance (DA), the second-biggest member of the country's 10-party governing coalition.

"We're anchoring what we do in the rule of law to make sure that we also protect social cohesion, even as we enhance our enforcement operations," he said.

A so-called government of national unity was formed in June last year, when the ruling African National Congress (ANC) failed to secure a parliamentary majority in a national vote for the first time since apartheid ended in 1994. The ANC and DA have since clashed repeatedly over policy and appointments, raising doubts over whether the alliance will remain intact.

"We're in a better space now than we were initially," Schreiber said, adding that disputes "are quite normal in any society with a coalition government."

The coalition succeeded in navigating a budget impasse and with a new fiscal cycle about to begin, Schreiber said he's hopeful any differences can be resolved in a "less public and destructive way."

"If we can succeed in that, I think that builds another layer of confidence that we actually are working pretty well together," he said.

Tony Yengeni is MKP's 2nd Deputy President

uMkhonto weSizwe Party (MKP) President Jacob Zuma on Thursday announced former African National Congress (ANC) National Executive Committee (NEC) member Tony Yengeni as the green party's second Deputy President.

In a statement, the MKP said Zuma decided to appoint a second Deputy President to oversee internal and broader political organisational issues, given the magnitude of international relations and geopolitical work Zuma continues to do.

Deputy President Dr John Hlophe will continue in his role and will focus on the party's Parliamentary work.

INTERNATIONAL RELATIONS

Meanwhile, Zuma recently visited Ghana where geo-economics and the future of African sovereignty took center stage, as well as discussions on the de-dollarisation agenda, the Brics currency initiative and lessons for Africa's own common currency.

The MKP said it rejected the continued domination of Africa's financial systems by Western currencies and institutions, and said "a multipolar world demanded a new financial architecture, one that serves humanity, not hegemony".

Zuma recently returned from Russia as part of the party's international relations work, and the MKP said he will soon brief party structures and the nation on developments.

"As part of his continued work of flying the South African flag high, Zuma will next week lead an MK Party delegation on a visit to Burkina Faso," the party said.

Parly committee makes recommendations for IEC commissioners

The Portfolio Committee on Home Affairs said on Thursday it will recommend to the National Assembly Dhaya Pillay, Mosotho Moepya and Joyce Pitso to serve as commissioners in the Independent Electoral Commission of South Africa (IEC).

The recommendations are due to three vacancies that will arise on November 4, as the term of office expires for IEC chairperson Moepya, IEC commissioner Pillay and IEC commissioner Dr Nomsa Masuku.

Following a process prescribed by the Electoral Commission Act, the panel recommended eight candidates for the committee's consideration, after which three final names were selected to go to the National Assembly, said committee chairperson Mosa Chabane.

Chabane said his committee is convinced that the recommended candidates have the skills, experience and capacity to improve the IEC and ensure it delivers the mandate for the organisation.

"It is important to note that all the candidates met the required standards. However, the committee had to recommend three candidates to the National Assembly for the appointments," he explained.

He said the committee deliberations were guided by the interviews of all candidates, the report presented to it by the Chief Justice, and the previous work of the commission.

Chabane stated that the committee acknowledged that the responsibilities of the commission required experienced and capable individuals, also noting experience, leadership, technical competency and stability and cohesion of the commission.

He said in making its decision the committee also looked at gender representativity and racial representativity.

The committee further raised concerns regarding the representation of other categories, particularly young people and persons with disabilities, he added.

DA tables no confidence motion in Lesufi

The Democratic Alliance (DA) said on Thursday it will be tabling a motion of no confidence against Gauteng Premier Panyaza Lesufi for what it termed "his reckless and irresponsible" implementation of the "failed" Amapanyaza project.

The DA will also seek clarification on the process by which the retraining of Amapanyaza members will be formally accredited and recognised by relevant institutions or potential employers.

The DA held a briefing on Thursday, following Lesufi's announcement that Amapanyaza would be disbanded for them to undergo training to become fully fledged Traffic Officers, over 36 months.

The DA previously cautioned that the Amapanyaza initiative was "ill-conceived, poorly implemented, and unsustainable".

Leader of the Official Opposition in Gauteng Solly Msimanga said his party would also request transparency regarding the funding source for this retraining initiative.

"We warned that the recruits were not adequately trained, insufficiently resourced, and did not meet the legal criteria to serve as peace officers. Premier Lesufi stubbornly chose to ignore these warnings, pressing ahead with a costly programme that has now collapsed under its own weight," he said.

He argued that the disbandment vindicated the DA's argument that the programme was "poorly planned, was very costly, and had no genuine intention of empowering these desperate men and women to become peace officers".

Msimanga described it as a gimmick to "score cheap political points".

He said the programme had been highly criticised because of damages and losses incurred.

"Some wardens lost their lives. Unfortunately, the truth has finally caught up with Lesufi, forcing him to reconsider this ill-conceived decision.

"It was inevitable that the arrogant and goalpost-shifting Premier Lesufi would not have disbanded this unlawful project until he was left with nowhere to turn. Were it not for the persistent pressure from the DA and the damning remarks by KwaZulu-Natal Provincial Police Commissioner, Lieutenant-General Nhlanhla Mkhwanazi, who confirmed before the Ad-Hoc Committee that the Amapanyaza were unlawful and not sanctioned under the South African Police Service Act, Lesufi would have carried on," stated Msimanga.

He pointed to the Public Protector's revelations that establishing, appointing, deploying and allowing Amapanyaza to conduct operations with the South African Police Service without legal authority, was in fact irregular.

He stated that Lesufi's actions violated Section 41(1)(f) and (g) of the Constitution, which prohibit government entities from assuming powers not granted to them or encroaching on the functions of another sphere of government.

"Under Section 206(4) of the Constitution, provincial governments do not have policing powers, only oversight and monitoring functions," he said.

Meanwhile, a DA-led Gauteng Provincial Government would implement the LEAP programme from the Western Cape to reduce crime.

The programme focuses on lawfully deploying peace officers in the areas most in need.

South Africa inflation edges up but economists see more rate cuts soon

South Africa's headline inflation rate edged up in September, but the increase was smaller than expected and economists said they thought the central bank could restart interest rate cuts soon.

Headline consumer inflation quickened to 3.4% in annual terms from 3.3% in August, below the median forecast of 3.5% in a Reuters poll.

A breakdown by Statistics South Africa showed the main drivers of the marginally higher rate were housing and utilities and food and non-alcoholic beverages, which both came in at 4.5% year-on-year last month.

Analysts said the inflation rate could continue to rise modestly in the remainder of 2025, but not to the extent the central bank will be worried.

A stronger rand exchange rate, falling inflation expectations and a sluggish economy could all encourage the South African Reserve Bank (SARB) to ease monetary policy further, they say.

The SARB has already delivered three interest rate cuts this year, but it paused at its last policy meeting in September to assess the impact of previous cuts.

It has forged ahead with policy easing despite announcing in July that it would effectively target 3% inflation, while the finance minister has not formally changed its 3%-6% target range.

The SARB's next monetary policy announcement is scheduled for November 20.