South Africa eyes October exit from illicit flows dirty list
- South Africa has made progress in addressing most of the technical compliance deficiencies that were previously identified on illicit flows. It now has a change to exit the FAFT list by October.
- The country was flagged in February 2023 for deficiencies in combating money laundering, terrorist financing, and proliferation funding.
South Africa stands on the cusp of a financial breakthrough, poised to exit the Financial Action Task Force’s (FATF) grey list—a designation for countries under increased scrutiny for lax oversight of financial flows—after being flagged in February 2023 for deficiencies in combating money laundering, terrorist financing, and proliferation funding.
Far from a static blacklist, the grey list reflects nations actively collaborating with FATF to strengthen their financial systems, and South Africa’s determined reforms signal a resolute step toward restoring global confidence and economic credibility.
“These countries are subjected to increased monitoring to ensure they implement agreed-upon action plans to rectify these deficiencies,” the FAFT explains in an update.
Notably, as of June 2025, Croatia, Mali, and Tanzania were removed from the grey list, while countries like Bolivia and the Virgin Islands (UK) were added
For South Africa, the FAFTA says a team of assessors is set to visit the country this month and it may be removed from the grey list by October. “The FATF has already concluded that South African authorities have fulfilled all or almost all of the required actions,” FATF President Elisa de Anda Madrazo told press.
She explained that the upcoming visit will focus on confirming that reforms to combat money laundering and terrorist financing have not only been implemented, but that they are sustainable.
Speaking on the sidelines of the G20 finance ministers and central bank governors’ meeting in South Africa earlier this week, De Anda said; “They will assess, report back to the plenary, and a decision will be made.”
De Anda, also met with South Africa’s central bank governor at the G20 event; “reaffirming the authorities’ commitment to addressing FATF concerns. What I can say is we do see political commitment from South Africa,” she explained.
Read also: Money laundering: The financial cancer killing Africa
South Africa, implications of leaving FATF grey list
Even though being placed on the grey list does not trigger immediate penalties, “it can seriously harm a country’s economy and reputation. It often undermines confidence in the financial sector and limits access to international aid and investment,” De Anda cautioned.
Underscoring the point, a 2021 report by the International Monetary Fund (IMF) found that grey listing can reduce capital inflows by as much as 7.6 per cent of a country’s GDP.
That being the case, it follows that “removal from the grey list would mark a huge milestone for Africa’s most industrialised economy, potentially restoring investor confidence and improving capital flows.”
According the FAFT, the Financial Action Task Force and the Eastern and Southern Africa Anti-Money Laundering Group assessed South Africa’s AML/CFT system. The assessment was led by the IMF and it resulted in the Mutual Evaluation Report of South Africa, recording the nation’s level of compliance with the FATF demands.
“The report concluded that South Africa has a solid legal framework for combating money laundering and terrorist financing but significant shortcomings remain,” the FAFT said in it’s report.
It, however, pointed out that despite the progress, South Africa needs to pursue money laundering and terrorist financing measures in line with its risk profile, including by proactively seeking international cooperation, detecting and seizing illicit cash flows, and improving the availability of beneficial ownership information.
The report says South Africa authorities need to make better use of the financial intelligence products provided by South Africa’s financial intelligence unit. “The country should also improve the application of the risk-based approach by obligated entities and supervisors.”
FAFT president commended the progress made, stating; “Since the 2021 assessment of South Africa’s measures to tackle money laundering and terrorist financing and the 2023 Follow-Up report, the country has taken a number of actions to strengthen its framework.”
She said in line with the FATF Procedures for mutual evaluations, South Africa has reported back to the FATF on the action it has taken since their mutual evaluation.
“Overall, South Africa has made progress in addressing most of the technical compliance deficiencies that were identified,” she concluded.
Tanzania, clean out of FAFT grey list
As of October 2023, Tanzania was listed in the FATF Grey List, which made it one of the jurisdictions under increased monitoring.
Again as pointed out, being on the FAFT Grey List is not necessarily a bad thing, on the contrary; “it means that the country is actively working with the FATF to address strategic deficiencies in its regime to counter money laundering, terrorist financing, and proliferation financing.”
A government report announced that; “The United Republic of Tanzania (URT) has been officially removed from the Financial Action Task Force (FATF) grey-list effective 13 June, 2025.”
The report acknowledged to that Tanzania, was grey-listed (placed under increased monitoring) by FATF in October, 2022.
With a clean slate, the IMF and Tanzanian authorities announced earlier this month that they have reached staff-level agreement on the fifth review under the Extended Credit Facility (ECF).
“Once approved by the IMF Executive Board, Tanzania will gain access to US$441 million in financing,” the report says.
The IMF notes that Tanzania’s economic outlook is favorable, an is enjoying robust growth, low inflation, an improved current account, and increased foreign exchange liquidity.
“In FY25/26, well-balanced public revenue measures are expected to maintain fiscal and debt sustainability, while safeguarding priority social spending,” reads the IMF report.
The IMF goes on to point out that Tanzania’s continued implementation of climate adaptation and mitigation policies, will help strengthen its resilience to climate-related risks.
Notably, a staff team from the International Monetary Fund (IMF) led by Mr. Nicolas Blancher, visited Tanzania during April 2-17, 2025, and held discussions on the fifth review under the Extended Credit Facility (ECF), and the second review under the Resilience and Sustainability Facility (RSF).
A press statement shared at the meeting announced to that subject to approval by the IMF Executive Board, the reviews will make available to Tanzania about US$440.8 million, bringing the total IMF financial support under the ECF arrangement to about US$907.4 million and about US$343.6 million under the RSF.
“I am pleased to announce that the IMF team and the Tanzanian authorities have reached a staff-level agreement on the policies needed to complete the fifth review under Tanzania’s ECF-supported program, and the second review of the RSF arrangement,” Mr. Blancher said noting that the IMF’s Executive Board will discuss the reviews further.
According to the IMF, Tanzania’s economic activity has been strong, with real GDP growth reaching 5.5 percent in 2024 and projected to increase to 6 percent in 2025.
It further notes that inflation, at 3.3 percent in March, has remained subdued and below the Bank of Tanzania (BoT) target of 5 percent.
However, the IMF cautions that; “While the economic outlook is favorable, risks are tilted to the downside. The external environment is uncertain, with risks from a slowdown in the global economy and trade, geoeconomic fragmentation, further intensification of the conflict in the DR Congo, and reduced foreign development assistance.”
“On the domestic front, the upcoming national elections may increase risks of fiscal pressures or, more broadly, reform slowdown,” warns the IMF.
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