South Africa’s removal from the Financial Action Task Force grey list in October 2025 marked a defining moment for the country’s small business sector.
Entrepreneurs who had faced high borrowing costs and nervous investor sentiment during the greylisting period finally saw renewed possibilities for growth.
President Cyril Ramaphosa described the exit from the list as a “boost for South Africa’s international reputation and global standing,” in his weekly address.
He welcomed the global recognition of progress made but cautioned that “the real work begins now.”
The President emphasised that although the country had met the FATF technical requirements, the commitment to transparency and trust must continue.
For small and medium enterprises, the delisting promised potential relief after more than two years of added pressure.
The 2023 greylisting had been triggered by weak enforcement rather than gaps in legislation. It resulted in greater scrutiny, higher compliance costs, and restricted access to credit for businesses engaging in cross border operations.
With South Africa back in good standing, these barriers were expected to ease, making trade and financing more accessible.
Luncedo Mtwentwe, Managing Director at Vantage Advisory and host of the SAICABIZ Impact Podcast, said the move sent a strong signal to investors.
“South Africa being off the grey list is a relief for our banks and a relief for investors across Africa to come and invest in South Africa. This signals confidence in our financial systems, showing that we have strong mechanisms to monitor and track illegal movement of funds and that we can meet global standards,” he said.
The FATF confirmed that South Africa had completed all 22 action items required to secure its exit. These included improvements in beneficial ownership transparency, enhanced capacity to investigate and prosecute financial crime, and strengthened anti terror financing measures. The reform effort aimed to restore trust after years of institutional decline and governance weaknesses.
Mtwentwe said what mattered most now was ensuring that the benefits of reform were felt by business owners who had borne the real cost.
“More than anything else, this cost of debt factor is what most of the banks have been saying, that the cost of debt for African countries is way higher than it should be,” he explained. “We are hoping that SMEs take advantage of this moment, not only to do business locally but to do business internationally.”
There were already signs that investor sentiment was improving. Moody’s reaffirmed Johannesburg’s credit rating at Ba3 with a stable outlook, citing sound financial management, moderate debt levels and resilience in the face of political challenges. This, combined with the FATF exit, pointed to steady progress in restoring confidence in South Africa’s economic direction.
The delisting represented more than a diplomatic victory. It offered a chance to build more inclusive growth, where regulatory requirements did not place unnecessary barriers in the path of small enterprises. Policymakers were expected to ensure that compliance remained a tool for trust building rather than a cost burden that discouraged entrepreneurship.
“We are hoping that SMEs will start doing international business and collaborations. This opens up those doors for partnerships and for inviting international investors to invest in Africa,” Mtwentwe said.
South Africa had passed a significant credibility test. The challenge ahead lay in maintaining that progress and ensuring that accountability, transparency and inclusion formed the foundation for the next chapter of entrepreneurial growth.
BUSINESS REPORT
