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We are currently dealing with lawlessness, inflation, fuel price hikes, load shedding, and so the list goes on.

Fancy adding another worry to the list? Sure, the more the merrier.

There’s talk of South Africa being greylisted by the Financial Action Task Force (FATF). That may not sound like something that should concern you too much but it could have real-world implications for all of us.

BusinessTech with some of the basics:

…if the country is deemed a high-risk jurisdiction to transact, anyone wanting to do business with South Africa will need to jump through an additional layer of compliance hoops.

[Senior associate Rebecca] Thomson said that it could also lead to an overall decline in GDP – as seen in Mauritius when they were greylisted, and GDP dropped by 1% in the first year of its listing. She added that South Africa could see the export and import of goods becoming more difficult.

The recently released Financial Action Task Force (FATF) Mutual Evaluation Report uncovered lax regulations in our banking system. These have allowed money laundering and terrorism funding to take place.

Moneyweb reports that while the Banking Association South Africa (Basa) is working to fix the weaknesses identified by the report, that may come too late:

 South Africa is perilously close to being subject to increased monitoring by FATF – ‘greylisted’ – mainly because of weaknesses in the country’s ability to enforce anti-money laundering and terrorism-funding regulations, and to investigate and successfully prosecute financial crimes.

Aside from the potential decline in GDP, as mentioned previously, there’s a good chance that being greylisted slows down potential international investment and financial transactions in the country.

While Nedbank CEO Mike Brown said we could still stave off being greylisted, adding that it wouldn’t be as bad as a credit rating downgrade, Standard Bank group chief executive Sim Tshabalala disagreed.

He said such a move could easily lead to us “being kicked out of the global financial system”:

Tshabalala noted that being flagged by the task force would effectively lead to South Africa being blacklisted by both the United Kingdom and the European Union.

Not only would this make borrowing more expensive, but it will likely also have several knock-on effects, said Tshabalala.

“The rand will weaken, inflation will spike, interest rates will go up, it will be more expensive to buy food, pay for petrol, buy homes, buy cars. The country can’t afford it.”

No, we cannot.

Someone get word to Siya Kolisi and the Springboks that the situation is dire. They play best with fire in the belly and we could all use a win this Saturday to gloss over a few cracks.

[sources:bustech&moneyweb]