After a lot of hard work, SA has been removed from the greylist. This is a list of nations with weak financial systems that can easily be manipulated to enable money-laundering and terror financing.
However, staying off that list will require even more hard work and vigilance. So too will the challenge of restoring SA to an investment-grade country.
For two years, the government has been working tirelessly to get off this dreadful list. It leant on one of its trusted veterans, Ismail Momoniat, to come out of retirement to lead the national effort to get SA off this list of rogues.
As well as being surrounded by a crack team of public servants, Momoniat worked in partnership with SA’s private sector through Business for SA, the implementation agency of Business Unity SA.
This focused work finally paid off. A week ago, the Financial Action Task Force (FATF), the global watchdog for money-laundering, terror financing and the financing of dangerous weapons, removed SA from the greylist. Being on the greylist suggests that a country’s systems are vulnerable to any of these risks.
The government and business deserve to be commended for this achievement.
But it has to be remembered that getting onto the list was a self-inflicted wound in the first place. The government had had ample time to avoid that costly shame.
During the fifth administration under Jacob Zuma, the docile National Assembly succumbed to the pressure of ANC enforcers who slow-rolled laws that required more financial scrutiny of individuals and entities deemed to be risky.
When Zuma was ousted in the bloodless coup of February 2018, it was too late to convince the task force that SA was serious about strengthening its well-regarded financial system against terrorists and other undesirables. Greylisting became inevitable.
Three other factors conspired to create a wider perfect storm: 2023 became the worst year of load-shedding; Transnet, the freight logistics monopoly, nearly collapsed; and crime and corruption surged even after state capture.
Worse, two years after former chief justice Raymond Zondo submitted his recommendations on how to prevent another round of state capture and huge corruption, none of the people he implicated are in jail or convicted. Only a handful are facing criminal prosecution.
All these factors, including a weak, incapable state, have made SA lose its investment-grade status. Despite all the efforts, the country is still considered junk. Not enough investors are willing to invest in factories, mines and the real economy to help the country tackle its poverty, unemployment and inequality.
In the past month or so, South Africans have witnessed a glimpse of the grand sleaze in the criminal justice system as part of two inquiries — one in an ad hoc parliamentary committee and another through a judicial commission of inquiry, or the Madlanga commission.
In a startling disclosure, an anonymous witness — a police investigator — testified last week that Shadrack Sibiya, the suspended deputy national police commissioner, was gifted a cash sum of R300,000 for his son’s wedding by a murder suspect who is awaiting trial.
In a well-regulated financial system, such amounts ought to be moved through the banking system, definitely not in hard cash.
While the country should be relieved at being removed from the greylist, it shouldn’t be complacent. It should urgently attend to the red flags and remaining challenges.
In 2018, there was much hope that Shamila Batohi, the national director of public prosecutions, would clean up the National Prosecuting Authority and prosecute most of state capture perpetrators. Alas, this has not happened.
Poor prosecutions were among the reasons for SA’s greylisting.
In a month, Batohi will retire after an underwhelming term.
In a year, the task force will be back in SA to review progress. It needs to find a country with demonstrable progress, not a plan.
