Critical milestone removes major barrier to South Africa’s emergence as Africa’s leading financial centre
The South African Financial Sector Competitiveness Taskforce, known as Operation Phumelela, welcomes the announcement by the Financial Action Task Force (FATF) that South Africa has substantially completed all 22 action items required of it when it was grey listed by the global anti-money laundering and terrorist financing body in February 2023.
This represents a critical milestone in South Africa’s journey to exit the grey list and restore its standing as a trusted jurisdiction in the global financial system. FATF grey listing has imposed substantial costs on South Africa’s financial sector, undermining the country’s competitiveness and its ability to serve as a regional financial hub for Africa.
The exit from the grey list, now expected in October, will reestablish South Africa’s good standing as a financial jurisdiction. This galvanises Operation Phumelela’s mission to enhance South Africa’s role as the continent’s leading financial centre and gateway for cross-border investment into Africa.
Operation Phumelela’s strategic response
Our goal is to ensure that South Africa’s exit from the grey list aligns with broader reforms to modernise the country’s financial regulatory framework to ensure the country generates a dividend in the form of growth and employment.
“FATF compliance is an essential foundation for the broader financial sector reforms necessary to unlock South Africa’s potential as Africa’s financial hub. With this regulatory cloud lifting, South Africa can focus on implementing the structural reforms needed to compete effectively with established international financial centres,” says Leila Fourie, chairperson of Operation Phumelela and chief executive of the JSE. “Exiting the grey list will restore confidence that global counterparts can trust South African businesses and financial institutions. This is essential to our competitiveness in serving clients across Africa and the world. It will build a foundation for the job-creating economic activity that our country desperately needs.”
What this means for South Africa’s financial hub ambitions
The progress toward FATF delisting creates significant opportunities for South Africa to advance its financial centre agenda:
- Enhanced credibility for regulatory reforms: Exit from the grey list will provide crucial momentum for Operation Phumelela’s broader reform programme, including foreign currency collateral acceptance, multi-currency listings and exchange control modernisation
- Restored access to global capital markets: South African financial institutions will regain access to international funding markets and correspondent banking relationships
- Competitive advantage in Africa: As several African jurisdictions remain on various international watch lists, South Africa’s clean FATF status will reinforce its position as the continent’s most trusted financial centre
- Support for regional integration: Improved international standing will facilitate South Africa’s role in supporting African Continental Free Trade Area financial integration and cross-border investment flows
Next steps and timeline
The FATF decision now proceeds to confirmation through an on-site assessment by the FATF Africa Joint Group. This will verify that reforms are sustainable and that political commitment remains in place for continued implementation. If the assessment is positive, FATF will formally delist South Africa from the grey list at its October 2025 plenary.
Successful delisting within two years would represent a significant achievement by National Treasury. It has coordinated a whole-of-government response involving the National Prosecuting Authority, the Hawks, the Financial Intelligence Centre and multiple other institutions. The final requirements centre on demonstrating sustained increases in investigations and prosecutions of complex money laundering and terrorism financing cases, reflecting South Africa’s risk profile.
Building on this foundation
Operation Phumelela views FATF compliance as an essential foundation for the broader financial sector reforms necessary to unlock South Africa’s potential as Africa’s financial hub. With this regulatory cloud lifting, South Africa can focus on implementing the structural reforms needed to compete effectively with established international financial centres.
“This milestone removes one of the most significant barriers to South Africa’s emergence as a leading global financial centre,” says Stuart Theobald, convenor of the Taskforce. “Now we can turn our full attention to the positive reforms – foreign currency capabilities, exchange control modernisation and capital market development – that will position South Africa to capture the enormous opportunities presented by Africa’s economic growth and development financing needs.”
We will continue our work to develop comprehensive reforms that enhance South Africa’s competitiveness, deepen its capital markets and strengthen its position as the gateway for investment into the region.
About Operation Phumelela
Operation Phumelela is South Africa’s Financial Sector Competitiveness Taskforce, established to enhance the country’s position as a leading international financial centre and gateway for investment into Africa. The task force has been convened by industry leaders to work with government and regulators to implement structural reforms that improve competitiveness, deepen capital markets and support economic growth through enhanced financial sector capabilities. More information is available at its website.
Operation Phumelela takes its name from the Zulu word meaning “to succeed” or “to achieve,” reflecting the initiative’s commitment to transforming South Africa’s financial sector competitiveness.
