HAMZA FAROOQUI: Investors set sights on SA after FATF delisting

SA is off the greylist of the Financial Action Task Force (FATF). The window is open. The question is whether the country has the discipline to make something of it.

Delisting is not a gold medal. It is a starting whistle. Investors will not celebrate. They will test whether this reform sticks and whether the broader investment climate is worth their money. Greylisting was an unnecessary and self-inflicted wound. It raised the cost of capital, slowed deal flow and damaged SA’s reputation. Removal simply gets the country back to where it should have been all along.

For institutional investors the message is simple. Compliance friction is lower. Transaction time is shorter. Risk flags on SA are being downgraded inside the models of banks, asset managers and development finance institutions. This does not guarantee a flood of capital. It means the excuses have run out. If the case is compelling, money will come. If it is not, investors will move on.

Public market funds will act first. Greylisting forced many to carry extra compliance burdens. Those restrictions are gone. Expect a recalibration in exposure to rand bonds and higher-grade bank paper. Spreads will not collapse but they could tighten enough to make SA marginally more attractive. In a competitive capital market marginal shifts matter.

Private capital will follow only if the environment improves. Global funds are not persuaded by hopeful speeches. They are persuaded by execution. If infrastructure projects remain stuck, if energy policy stays confused, if logistics remain unreliable, they will keep their money elsewhere.

For SA businesses the era of using the greylist as a shield is over. The banking sector has breathing room. Capital inflows can accelerate. The pressure shifts to delivery. Companies that want to scale will find capital if they present credible strategies. Those that rely on policy excuses are out of runway.

Hospitality and tourism should move fastest. Greylisting sat quietly in the background of many investment decisions. Now it is gone. Global hotel groups and funds are scouting aggressively across emerging markets. Dubai, Saudi Arabia, Rwanda and Mauritius are offering speed, security and seamless aviation access.

SA has world-class natural products and brand power, but that has never been the issue. Investors will not commit if airports are constrained, visas are unpredictable, services collapse in key nodes and crime undermines visitor confidence.

This sector has the chance to reassert itself as Africa’s premium destination for luxury, business travel and experience-based tourism. It must modernise, build partnerships and lobby aggressively for better enabling conditions. If not, capital will simply build the next resort elsewhere.

I have just returned from the UAE-Africa Invest Summit, the Future Hospitality Summit in Dubai, and the Skift Global East Forum in Abu Dhabi, and the contrast is sobering. There, governments and private capital are moving in lockstep to build the next era of global travel. Billions are being deployed into new districts, cultural precincts, aviation expansion, sustainable tourism corridors and talent pipelines. The pace is relentless and the ambition is unapologetic.

This is where the government’s role becomes decisive. Policy certainty is the single most powerful form of capital attraction. Investors do not expect incentives; they expect consistency. The tourism and leisure sectors are deeply dependent on long-term policy signals – from visa frameworks and aviation access to infrastructure and land-use clarity. When the government provides a predictable regulatory environment capital can price risk accurately, partnerships can be structured efficiently and projects can scale faster.

SA’s policymakers should recognise that stability, transparency and credible timelines are themselves investment tools. The countries winning the race for tourism capital – from the Gulf to East Africa – are those where the government acts as an enabler, not a bottleneck. SA can do the same, but only through disciplined co-ordination between the public and private sectors.

Investors from Europe, the Gulf and Asia are looking to Africa for the next frontier. They will not hesitate to invest here, but they will not tolerate hesitation, policy drift or basic infrastructure failure. SA has the product to compete at the top of the global hospitality table. It simply must decide whether it has the urgency and execution to do so.

The government now carries the heaviest burden. Delisting is conditional on continued enforcement. The world is watching. If prosecutions stall, if politically exposed persons skate past scrutiny, if beneficial ownership systems fall apart, confidence will evaporate. The FATF can put you back on the list faster than it took to get off it.

SA’s structural weaknesses remain untouched by this development. Power reliability, Transnet capacity, crime and corruption continue to depress appetite. Delisting clears one hurdle. The race has barely begun. Progress must now show up in electricity availability, functioning rail and port systems and visible action against corruption.

The next 12 months matter more than the last two years. The Treasury, Reserve Bank and private sector must treat this as a narrow window to reintroduce the country to global capital markets. That means a pipeline of bankable infrastructure projects, clear fiscal direction and an honest communication strategy that shows delivery, not promises. The country needs its best business leaders and financial institutions telling a unified story backed by measurable progress.

Institutional investors are not sentimental. They are hunting for yield and stability. They have options. Many emerging markets offer higher growth, lower operational risk and faster policy execution. SA does not win by asking for patience. It wins by proving it can deliver.

This is a moment of clarity. SA has been given another chance. What happens next will determine whether the country attracts capital or continues to talk about unrealised potential. Investors will not wait forever. Nor should we.

⋅ Farooqui, a World Travel & Tourism Council executive member, is founder and CEO of Millat Group.