BUDGET 2023 | We should be prepared for possible greylisting: Godongwana

Finance minister Enoch Godongwana’s 2023 budget is committed to funding institutions aimed at fighting organised crime, but South Africans should be prepared for a possible greylisting announcement by Friday evening, he warned. 

Since the Financial Action Task Force (FATF) alerted the country to the risk, citing gaps in measures aimed at addressing money laundering and organised crime, the government has championed the General Laws (Anti-Money Laundering and Combating Terrorism Financing) and Protection of Constitutional Democracy Against Terrorist and Related Activities amendment acts.

During his budget speech in Cape Town on Wednesday, the minister said the FATF was due to make a decision on whether to greylist South Africa on Friday and while the government had made a number of interventions, the jury was still out on whether they were enough. 

“The FATF plenary will make its decision later this week on whether or not to put South Africa under increased monitoring, otherwise known as greylisting. We should be prepared for that possibility,” Godongwana told MPs. 

During a briefing ahead of the budget speech, National Treasury acting director-general Ismail Momoniat said the government and the FATF had engaged on the effectiveness of the state in implementing its laws. 

“Firstly, FATF does not want us to talk until they have made their decision on Friday evening. I think we have prepared for all eventualities. The impact will be in how much progress we have made in our preparations. I think we have made phenomenal progress and that will be recognised,” he said. 

The Budget Review said: “As noted in the 2022 medium-term budget policy statement, maintaining the integrity of South Africa’s financial system is critical to long-term growth. Government is addressing deficiencies in the anti-money-laundering framework identified by the FATF."

It added that changes were aimed at reducing the risk of financial crime and corruption, and avoiding South Africa being greylisted.

“Over the 2023 medium-term expenditure framework period, functions critical to the anti-money-laundering regime, particularly in the law-enforcement agencies and the Financial Intelligence Centre, will receive additional resources to carry out this work,” the document said. 

The Budget Review added that National Treasury would support efforts to ensure the Integrated Criminal Justice Strategy avoids a repeat of R30m in non-expenditure. 

“The detective services programme is allocated R66.3bn over the MTEF period, of which R7bn is allocated to the Directorate for Priority Crime Investigation,” the review said. 

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