More work still to be done before SA could be removed from grey list

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Treasury has acknowledged there is still a lot of work that needs to be done before June next year when the country stands a chance to be removed from the Financial Action Task Force’s greylist.

Countries with deficiencies in laws governing money laundering and terror financing are greylisted until those are corrected.

Treasury’s DG Duncan Pieterse says so far, only five out of the 22 action items have been successfully dealt with.

“Five of 22 action items (have been) addressed or largely addressed. That’s why I said still a lot of work between now and June next year. And those relate to legal provisions, criminalising terror financing and South Africa’s sanction regimes.”

Meanwhile, the Treasury says it is very unfortunate that state-owned companies have been issued with numerous bailouts and that it has added to the country’s economic woes.

This came out during the discussion of submissions on the 2024 budget at a meeting of Parliament’s Joint Standing Committee on Finance and Select Committee on Finance.

According to the head of Treasury’s budget office, Edgar Sishi, a few submissions have been made about concerns over bailouts for SOEs.

“This is a very unfortunate, galling reality of fiscal history that shouldn’t have happened. (We) should avoid (that) as much as possible. They have had a lot of support, leading to the government not being able to fund what needs to be funded. In fact, (they) contributed to the fiscal problems we are trying to fix.”

The Treasury says it does not agree with sentiments that fiscal consolidation is internationally criticized.

Sishi says Treasury has noted concerns and criticisms around its fiscal consolidation decisions, but they are convinced it is the right path to follow.

“We don’t see broad or international repudiation of fiscal consolidation as a principle. What we see are warnings and cautions about self-defeating actions and strategies that we make sure the steps we take are strategic. In fact, international advice has been to implement fiscal consolidation. So, we respectfully disagree.”

Challenges of bailing out struggling SOEs: George Tshesane;