Corruption has a protracted and sordid historical past in South Africa, however don’t look to the Monetary Motion Job Power (FATF) to assist battle it. In late October, the world’s main intergovernmental anti-money laundering watchdog eliminated South Africa from its “grey listing” of nations topic to elevated monitoring. The choice raises main issues at a time when South Africa, which is able to host the G-20 summit this weekend, is embroiled in a sweeping corruption scandal implicating leaders on the highest ranges of presidency and involving dozens of politically motivated killings.
South Africa landed on the FATF’s grey listing in February 2023 resulting from obtrusive deficiencies in its protections towards cash laundering and terrorism financing. The itemizing adopted the hearings and subsequent studies of the Zondo Fee, which operated from 2018 to 2022. The findings named and shamed a whole lot of South African officers for acts of corruption, together with practically 100 outstanding African Nationwide Congress (ANC) occasion officers—a lot of whom stay in energy to this present day. This and different graft led to years of rolling energy outages, the deterioration of state-owned enterprises, and extreme financial stagnation.
Corruption has a protracted and sordid historical past in South Africa, however don’t look to the Monetary Motion Job Power (FATF) to assist battle it. In late October, the world’s main intergovernmental anti-money laundering watchdog eliminated South Africa from its “grey listing” of nations topic to elevated monitoring. The choice raises main issues at a time when South Africa, which is able to host the G-20 summit this weekend, is embroiled in a sweeping corruption scandal implicating leaders on the highest ranges of presidency and involving dozens of politically motivated killings.
South Africa landed on the FATF’s grey listing in February 2023 resulting from obtrusive deficiencies in its protections towards cash laundering and terrorism financing. The itemizing adopted the hearings and subsequent studies of the Zondo Fee, which operated from 2018 to 2022. The findings named and shamed a whole lot of South African officers for acts of corruption, together with practically 100 outstanding African Nationwide Congress (ANC) occasion officers—a lot of whom stay in energy to this present day. This and different graft led to years of rolling energy outages, the deterioration of state-owned enterprises, and extreme financial stagnation.
The result’s nothing wanting a rustic in disaster. In a speech final month, South African President Cyril Ramaphosa declared an financial emergency, highlighting how “corruption corrodes competitiveness” and contributes to the nation’s financial malaise. South Africa has one of many highest total unemployment charges on the earth: At round 32 p.c, it’s greater than thrice increased than the following highest unemployment price of any G-20 nation. Amongst younger South Africans ages 15 to 24, joblessness reached 62.4 p.c this 12 months.
There may be little indication that corruption has been contained. One other investigative panel—the Madlanga Fee—is now probing an expansive corruption scandal involving police-linked kickbacks from organized crime syndicates in addition to high-level interference in a job power addressing political killings. South Africa’s just lately dismissed police minister stands accused of aiding a legal cartel and receiving funds from a gangster whose crimes allegedly embody graft, contract fraud, and even tried homicide.
Almost 150 municipal workers have been assassinated in South Africa since 2018, in addition to 5 prosecutors within the final 5 years. But in response to the pinnacle of South Africa’s Nationwide Prosecuting Authority, Shamila Batohi, who testified earlier than the fee this month, “these of us in energy that must be doing one thing about it are powerless to do something about it.” Put merely, she stated, “criminals are taking up our nation.” For this reason, in response to the World Organized Crime Index, South Africa is thought-about a “haven for legal mafias and managers to launder cash and set up firms for cash laundering actions.”
South Africa has additionally change into a hub for terrorist financing. The U.S. Treasury Division sanctioned a number of South Africa-based Islamic State organizers and monetary operatives in 2022, 2024, and 2025. A few of these, together with Islamic State facilitator Zayd Gangat, presently await trial in South Africa, however others, comparable to Islamic State cell chief Farhad Hoomer, proceed to evade justice. On a number of events, South African authorities have both been sluggish to research or did not correctly deal with key proof. After fees towards Hoomer had been repeatedly dropped—together with these associated to a lethal assault on a South African mosque—he subsequently tried to launch the Islamic State of Africa as an official political occasion in South Africa this 12 months. He stays free to this present day.
So why would the FATF, which claims to assesses whether or not international locations are taking efficient motion to forestall cash laundering and terrorism financing, take strain off South Africa in the midst of one other corruption scandal? The quick reply is that the FATF missed the forest for the timber, praising reforms on paper that did little in observe to rein in systemic corruption.
It’s true that the nation made legislative fixes to handle sure deficiencies beforehand referred to as out by the FATF. For example, South Africa rolled out a helpful possession registry that purports to make it simpler to research quite a lot of monetary crimes and applied laws geared toward closing regulatory gaps associated to cryptocurrency transactions. Moreover, in accordance to the FATF’s studies, South Africa has boosted cross-border cooperation, tightened supervision of high-risk sectors, and stepped up using monetary intelligence in investigations. However in the case of precise prosecutions of advanced cash laundering instances or the arrests of corrupt officers and others linked to terrorist teams, South Africa’s efforts stay ineffective. The FATF is both overlooking the proof or turning a blind eye.
In line with Open Secrets and techniques, a South African anti-corruption watchdog group, there have been no profitable prosecutions of any vital politician or company official in South Africa as of July 2025. Prosecutions associated to terrorism finance stay restricted as nicely, partially as a result of South Africa doesn’t think about Hamas or Hezbollah to be terrorist teams. Hamas-linked teams comparable to Al-Quds Basis South Africa, the native department of a U.S.-designated Hamas affiliate, proceed to function freely. The identical applies to Hezbollah financier Nazem Ahmad and his South Africa-based community of firms.
However even the place South African regulation theoretically permits a crackdown—within the case of the Islamic State, as an illustration—and the place reforms comparable to the brand new helpful possession registry and cryptocurrency rules have been applied to help regulation enforcement investigations, South African authorities have repeatedly did not deliver perpetrators of terrorism-linked offenses to justice. This can be as a result of, in accordance to South Africa’s main information service, “only one prosecutor” is working “to cost those that assist fund overseas terror teams.”
If previous is prologue, then the Madlanga Fee—just like the Zondo Fee earlier than it—will seize consideration however fail to ship accountability. However South Africa’s deficiencies have a attain that stretches nicely past its borders. South Africa serves as a gateway to Africa, and the dangers prolong to the worldwide economic system. The nation’s crucial mineral reserves, for instance, are essential for the world’s international power transition, primarily based on knowledge from the Worldwide Power Company’s 2025 World Important Minerals Outlook. However a state that can’t police its personal establishments can not credibly handle the extraction, processing, or export of pure sources, a sector infamous for abuse and corruption.
There stays a slender window to appropriate course. The FATF’s subsequent analysis of South Africa, set to start in early 2026 and conclude in October 2027, will decide whether or not the nation returns to the grey listing. The US and its allies—a lot of which sit on the FATF—ought to make sure that this member-led technical overview course of confronts South Africa’s entrenched corruption, its power failure to prosecute advanced cash laundering and terrorism finance instances, and the insufficiency of its legislative reforms. If the issues stay unaddressed, the FATF have to be keen to return South Africa to the listing of nations topic to elevated monitoring. Something much less would render the establishment complicit in legitimizing the wholesale decay of South Africa’s most essential establishments. Sadly, as Transparency Worldwide attests: Pretoria stays “[c]ommitment wealthy, however implementation poor.”
Washington, nevertheless, needn’t await the FATF to behave. The US ought to use World Magnitsky sanctions to focus on the South African officers and enterprise elites most liable for systemic graft and human rights abuses. Congress is already pushing in that route: The pending bipartisan U.S.-South Africa Bilateral Relations Evaluation Act requires a reassessment of the connection and the identification of ANC and authorities leaders eligible for sanctions. To this finish, the Zondo and Madlanga commissions present an abundance of proof.
Corruption has change into South Africa’s de facto foreign money—traded by elites for energy, safety, and revenue—whereas atypical South Africans pay the worth in unemployment and insecurity. As Pretoria gears as much as host the G-20 summit, the FATF’s failure to acknowledge the continued extent of corruption not solely betrays South Africans but additionally undermines the very structure meant to guard the globe from the contagion of legal governance. If South Africa’s slide continues unchecked, the price won’t cease at its borders.
