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The South African government must stop its tendency to wait until the country is in crisis mode before dealing with issues. This is the view of Business Unity South Africa (Busa) CEO Cas Coovadia, referring to the country’s recent greylisting.
“We need to stop, in this country, waiting for crises to become opportunities before we do anything,” he said.
Coovadia was speaking at an event titled ‘Beyond the Grey List: Mapping South Africa’s Recovery’, hosted by the Association of Black Securities and Investment Professionals and Standard Bank in Rosebank on Friday.
Read: Godongwana’s plan to get SA off the grey list
Last month, South Africa landed on the Financial Action Task Force (FATF) grey list for falling short in measures aimed at countering money laundering and terrorism financing. While the FATF originally presented South Africa with 67 areas of concern in October 2021, the country has managed to deal with 59, leaving eight strategic deficiencies outstanding.
South Africa is now racing to resolve these deficiencies in the hope that it will exit FATF’s grey list by January 2025.
Read:
Coovadia slammed the government for not addressing the rampant corruption that played out during former president Jacob Zuma’s nearly decade-long rule sooner.
“The crisis hit us during the Zuma years and it’s got worse since then,” he said.
High cost
The cost of state capture is estimated anywhere between R50 billion and R500 – the former being Shadow World Investigations’ Paul Holden’s approximations, and the latter according to President Cyril Ramaphosa.
“The financial sector and the Reserve Bank started raising the flags, started talking to FATF about it, but other parts of government just did not see it as a priority,” said Coovadia.
“It was a crisis then – we [didn’t] have to wait for it to play out, and that’s why I don’t see this as an opportunity.
“We shouldn’t have to wait for greylisting to deal with the significant challenges we have.”
Coovadia’s remarks contrast those of Ramaphosa, who last month said South Africa’s greylisting is an opportunity to strengthen the fight against financial crimes.
“The situation is concerning but less dire than some people suggest, Ramaphosa wrote in his weekly newsletter.
Read:
Finance Minister Enoch Godongwana said the greylisting has pushed the government to pass new laws, helping it close some of the loopholes that existed in the country’s regulatory framework at a faster pace than would have ordinarily been achieved.
Coovadia said the crisis South Africa is in should not be downplayed, and that while it is difficult to quantify some of the impacts the greylisting will have, with the myriad challenges that already exist, the country is in a dire state.
Support for the weaker elements
Standard Bank SA CEO Lungisa Fuzile said in mapping South Africa’s pathway off the grey list, the country’s financial services sector – which has been lauded for being sophisticated and was not found to be faltering by the FATF – must support the “weaker” law enforcement side.
“The other parts of the system have been found wanting,” he said.
“As a country, what we then need to do is to say ‘How do we use the stronger part of the system to bolster the weaker part of the system?’”
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