CEO Column: Off the grey list, but SA needs more ticks on its 'to do' list
If there’s one thing to learn from South Africa’s exit from the Financial Action Task Force ‘grey list’, it is the power of putting somebody in the naughty corner.
In less than three years government addressed 22 action items, among them legislative reforms, institutional strengthening, and compliance monitoring. Meetings were called, officials were trained, and law enforcement agencies talked to each other, a lot.
It takes longer to fix a leaking tap in some municipalities than it took to mount a co-ordinated inter-departmental blitzkrieg to plug the gaps in South Africa’s entire financial regulatory framework.
Nobody wants to be in the naughty corner, it seems, nor on the grey list. And now we’re not.
That we exited the list so efficiently – unlike other grey listed countries like South Sudan, Namibia and Angola – is a remarkable achievement that owes much to the expertise of those mandated to make it happen. We must commend all those involved.
As much as the success signals South Africa’s ability to address systemic challenges, it is a reminder that we have other lists to address, some of which we have reported on in this newsletter. Our lead story in this week’s edition reveals how South Africa tops the list of countries with untapped export potential – a whopping R1,3-trillion (or 20% of our GDP) that simmers unrealised within our economy.
There are other less exciting lists, such as the World Bank’s Container Port Performance Index, which partly explains our untapped export figure. For too long our ports are languishing right at the bottom, or near the bottom, of that list, as reported previously in this newsletter.
Fortunately, here too we are seeing coordinated intervention that sees us moving up the World Bank Port list, albeit slowly.
Exiting the grey list has rightly earned high praise, particularly in the context of concerning broader crime trends. President Cyril Ramaphosa last week described our FATF response as “a clear demonstration of South Africa’s commitment to improving the business and investor climate, and to ongoing reform”.
However the President is well aware that exiting the ‘grey list’ does not mean entry onto the list of top investor-friendly countries unless we plug other gaping holes in our criminal justice system.
South Africa may have inched off the grey list, but crime remains top of the list of business impediments in most business environment surveys.
We know we can galvanise resources and pull back from the brink when needed.
Unfortunately, this only seems to happen when we are in a corner.
John Lawson
CEO of the Cape Chamber of Commerce and Industry