Removing SA from greylist will take time, warns economist

"An investor will not go to a country where it's financial protection is not so strong, where it's a country where they easily launder money. It may be part of driving away potential investors." 

During the South African Reserve Bank's AGM on Tuesday, Governor Lesetja Kganyago said being greylisted by the global anti-money laundering watchdog had hindered economic growth. 

Kganyago explained that South Africa is left with two reporting cycles, namely in September and January, to act on recommendations made by the FATF.

Dr Gumede, who is with UKZN, believes it will take more than being removed from the greylist to improve the country's economy.

READ: SARB concerned over SA’s slow economic growth

"One including skills that you have. Companies invest here if they have relevant skills and if we make the cost of doing business in the country quite cheaper. 

"Strengthening regulations in the financial sector is very important. Government needs to invest a lot in infrastructure so that companies when they come and invest here, they know exactly that there is infrastructure for them to do business."  

He says the country has had a trend of financial struggles which cannot be solved in one go.

"When you get greylisted it is not like you did something yesterday and you get greylisted today. It is a series of activities that you see over time, then that is why it takes time to get out of greylisting. There are a number of activities that doesn't inspire confidence in our bank system. 

"VBS, at least four million US dollars at the Phlala Phala farm, people who are being implicated at the state capture commission report not being prosecuted. All of these measures of corruption happening in the country - they do not really present a good picture of South Africa."   

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