South Africa has been taken off a global watchdog\u2019s\u00a0dirty-money list, providing a boost for increased foreign investment in Africa\u2019s largest economy.\u00a0<\/p>\n\n\n\n
The Paris-based Financial Action Task Force said on Friday that South Africa, along with Nigeria, Mozambique, and Burkina Faso, is no longer on the list of jurisdictions subject to increased monitoring.<\/p>\n\n\n\n
This comes after the affected governments stepped up efforts to combat money laundering and terrorist financing. <\/p>\n\n\n\n
The yield on the South African benchmark 10-year bond fell 4 basis points to 8.9% at 5:27 p.m. local time and the rand extended gains, appreciating 0.6% against the dollar.<\/p>\n\n\n\n
South Africa and Nigeria landed on the grey list in February 2023, while Mozambique was added in October 2022 and Burkina Faso originally got designated in February 2021. <\/p>\n\n\n\n
At the FATF\u2019s June plenary, the organisation praised the nations for their recent reforms to address illicit financial flows.<\/p>\n\n\n\n
South Africa\u2019s exit from the list should reinforce market optimism and signal progress on government reforms. <\/p>\n\n\n\n
This is a boost for institutional strength that may lift sentiment, lower bond yields and ease debt-servicing costs, even if it doesn\u2019t alter the growth outlook, Jee-A Van Der Linde, senior economist at Oxford Economics, said.<\/p>\n\n\n\n
The removal from the so-called grey list should also make it easier and cheaper for citizens working overseas to send money home. <\/p>\n\n\n\n
The FATF announcement may also help pave the way for new investments by foreign firms. <\/p>\n\n\n\n
Prescient Investment Management CIO Bastian Teichgreeber said that getting off the grey list will not result in any massive moves in South African assets, with markets already expecting the removal. <\/p>\n\n\n\n
However, it will boost confidence among international investors, which is crucial for South Africa to grow its economy. <\/p>\n\n\n\n
Under the presidency of Mexican official Elisa de Anda Madrazo, the FATF has revamped its grey-listing criteria. <\/p>\n\n\n\n
It has placed a greater emphasis on scrutinising the body\u2019s wealthiest members while putting less of a focus on jurisdictions classified as least-developed countries, which typically pose a lower systemic risk.<\/p>\n\n\n\n
The FATF assessment calendar shows South Africa could have an on-site visit in April 2027, when it will be evaluated on the group\u2019s new methodology for the fifth round of reviews.<\/p>\n","protected":false},"excerpt":{"rendered":"
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