South Africa Officially Removed from FATF Grey List
South Africa has been removed from the Financial Action Task Force (FATF) grey list, a major step that could boost investor confidence and strengthen foreign investment in Africa’s largest economy.
The FATF — a Paris-based global watchdog that monitors money laundering and terrorist financing — announced on Friday that South Africa, Nigeria, Mozambique, and Burkina Faso are no longer under “increased monitoring.”
Economic Boost and Market Reaction
The news immediately lifted local markets.
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The rand appreciated 0.6% against the dollar, and
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The 10-year bond yield dropped 4 basis points to 8.9% by late afternoon trading.
South Africa was first added to the grey list in February 2023, after the FATF identified weaknesses in its anti-money-laundering framework. Since then, the government has worked to tighten oversight, strengthen legislation, and enhance financial intelligence operations.
Reform Recognition
At the FATF’s June plenary, member nations praised South Africa for its significant reforms to curb illicit financial flows and improve compliance.
Economists say the move should boost institutional credibility, reduce borrowing costs, and encourage foreign investment.
“Getting off the grey list reinforces market optimism and signals progress on governance reforms,” said Jee-A Van Der Linde, senior economist at Oxford Economics. “It may not change the growth outlook immediately, but it supports fiscal stability and investor confidence.”
Investor Confidence and Outlook
While markets largely anticipated the removal, experts say it will strengthen South Africa’s reputation among global investors.
“Although we don’t expect massive asset movements, this will improve international confidence — a vital ingredient for long-term economic growth,” said Bastian Teichgreeber, CIO at Prescient Investment Management.
The decision also makes it easier and cheaper for South Africans abroad to send money home, improving remittance flows.
What’s Next
Under FATF’s new leadership, headed by Elisa de Anda Madrazo of Mexico, the organisation has updated its grey-listing criteria, placing more scrutiny on wealthier member states and less on least-developed nations.
South Africa is scheduled for its next FATF review in April 2027, which will assess compliance under the body’s revised evaluation methodology.
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