South Africa Faces Renewed Greylisting Risk Over Stalled Anti-Corruption Reforms

FATF Greylisting: A Resurfacing Risk

Business Leadership South Africa (BLSA) has signaled potential trouble ahead for South Africa’s international financial standing, warning that inadequacies in anti-corruption reform could threaten the country’s removal from the Financial Action Task Force (FATF) grey list. Despite recent improvement in broader economic reforms, BLSA stresses that gaps remain in measures to combat financial crime and corruption.

Assessment of Reform Progress

In BLSA’s most recent Reform Tracker review, published on October 28, the country’s overall reform completion index rose to 72.5 in the July-to-September quarter, an increase from 71.3 the previous period. This new figure marks the highest index score since BLSA began monitoring in March 2024, suggesting positive momentum in several areas of economic renewal.

However, the specific score for anti-corruption reforms stands still at 51.2unchanged from the previous quarter. This figure remains worryingly low as South Africa undergoes a new mutual evaluation by FATF, the leading international body for anti-money laundering and combating terrorist financing standards.

Recent History and Ongoing Evaluation

South Africa achieved removal from the FATF grey list in October 2025 following reform of its anti-money laundering and counter-terrorist financing frameworks. The country is now under renewed scrutiny, with a mutual evaluation process that will continue until October 2027. During this period, FATF will assess whether South Africa can maintain its reform achievements and demonstrate effective law enforcementespecially through successful financial crime investigations and prosecutions.

Effective investigations into money laundering and related criminal networks are now under the spotlight. BLSA cited concerns articulated by Ismail Momoniat, who played a key role in ensuring South Africa’s original removal from the grey list. Momoniat warned that enduring weaknesses in law enforcementespecially challenges in pursuing organised crime, securing convictions, and asset recoverycould undermine progress.

Sectoral Reform Advances

Despite concerns about the anti-corruption category, several other sectors within South Africa have shown progress according to the reform tracker:

• Electricity reforms rose from 67.8 to 69.4
• Freight logistics improved from 69.6 to 72.5
• Financial sector reforms advanced from 88.1 to 89.5
• Criminal justice edged forward from 84.2 to 84.5

Governance, however, slipped slightlyfrom 55.0 to 54.6suggesting that oversight and management reforms may require renewed focus.

Expert Perspective and Remaining Challenges

BLSA chief executive Busisiwe Mavuso welcomed the improvements in the overall reform index, calling the momentum a “reversal of the previous quarter’s trend” and highlighting concrete progress in water, energy, and transport. She emphasised that strong and efficient network sectors are vital for a robust economy.

During this quarter, the tracker assessed 181 reform deliverables. Of the 179 items directly comparable with the previous quarter, 33 showed improvement while only seven regressed. This illustrates a positive direction for much of South Africa’s reform agenda.

However, BLSA cautioned that “weaknesses in anti-corruption reforms remain a concern,” noting the persistent challenge of demonstrating “sustained effectiveness” in the fight against financial crime. BLSA also connected ongoing reform to broader economic priorities such as reducing high unemployment and overall economic resilience.

Broader Implications and Outlook

The FATF grey list represents a set of countries subject to increased monitoring due to shortcomings in preventing illicit financial flows. Placement on the list can have far-reaching implications, including more rigorous cross-border financial scrutiny and possible impacts on foreign investment and banking relationships.

For South Africa, a return to the grey list is a risk rather than a foregone conclusion, according to BLSA’s review. Nevertheless, the warning underscores the importance of not just progressing reforms in a general sense but proving their effective implementation, especially in arresting and adjudicating financial crime.

As South Africa continues under FATF observation, continued progress in anti-corruption measures and enforcement will be pivotalnot just for maintaining an improved international reputation, but for strengthening economic recovery and governance at home.

Conclusion

The latest findings from BLSA’s Reform Tracker highlight a mixed picture: strong progress in several areas of economic reform, but an urgent need to advance anti-corruption efforts in order to avoid renewed risk of FATF greylisting.

Ensuring that laws and policies translate into concrete enforcement actions will be key in sustaining South Africa’s standing with international partners and securing a more resilient financial future.