“This is a milestone that improves credibility, lowers transaction costs, and smooths cross-border transactions,” says Sanisha Packirisamy, chief economist at Momentum Invest. She cautions, however, that it does not automatically trigger economic growth.
Greylisting and Its Effects
South Africa was greylisted in February 2023 for failing to meet FATF standards on combating illicit financial flows, terrorist funding, and threats to the integrity of the global financial system. While the listing raised concerns, markets largely anticipated the outcome, and financial stability was maintained during the period.
“By late 2024, investors had already priced in the likelihood of delisting,” note legal experts Lenee Green, Lerato Lamola, and Michael Denega. “Credit analysts viewed the greylisting as a transitory compliance risk, not a structural credit issue.”
During greylisting, domestic institutions faced higher compliance costs, including regulatory penalties and extra scrutiny from foreign partners. Now, these measures remain in place, but the perception of risk has diminished.
What This Means for Investment
Financial experts say the exit signals an improved environment for foreign investment. Philip Robotham of Schroders explains that delisting makes it cheaper and easier to do business, thanks to corrected deficiencies, better financial crime detection, and enforceable compliance standards.
Momentum continues as South Africa builds on other positive developments, including energy stability and enhanced public-private sector engagement. Professor Raymond Parsons from NWU Business School notes that delisting removes a key policy uncertainty, improving investor confidence and lowering costs for international transactions.
Reputation as National Capital
Reputation management expert Tshepo Matseba describes the exit as a reputational inflection point. He emphasizes that trust in South Africa must be treated as national equity, maintained through credibility, consistency, and competent governance.
Market reactions were muted but positive. Analysts point out that while the exit does not resolve all economic challenges, it signals a clear commitment to reform, strengthening South Africa’s case as a destination for sustainable, long-term investment.
The Road Ahead
Experts caution that continued vigilance is required. Compliance alone does not guarantee growth, but it lays the foundation for a more resilient financial system. South Africa’s next challenge is to turn this milestone into lasting economic benefits, keeping both domestic and international investors confident in the country’s stability.
