South Africa is off the grey list of the Financial Action Task Force (FATF). The window is open. The question is whether the country has the discipline to make something of it.
Latest thinking by Hamza Farooqui, CEO Millat Group
Delisting is not a gold medal. It is a starting whistle. Investors will not celebrate. They will test whether this reform sticks and whether the broader investment climate is worth their money. Grey listing was an unnecessary and self-inflicted wound. It raised the cost of capital, slowed deal flow and damaged reputation. Removal simply gets the country back to where it should have been all along.
For institutional investors, the message is simple. Compliance friction is lower. Transaction time is shorter. Risk flags on South Africa are being downgraded inside the models of banks, asset managers, and development finance institutions. This does not guarantee a flood of capital. It means the excuses have run out. If the case is compelling, money will come. If it is not, investors will move on.
Public market funds will act first. Grey listing forced many to carry extra compliance burdens. Those restrictions are gone. Expect a recalibration in exposure to rand bonds and higher-grade bank paper. Spreads will not collapse but they could tighten enough to make South Africa marginally more attractive. In a competitive capital market, marginal shifts matter.
Private capital will follow only if the environment improves. Global funds are not persuaded by hopeful speeches. They are persuaded by execution. If infrastructure projects remain stuck, if energy policy stays confused, if logistics remain unreliable, they will keep their money elsewhere.
For South African business, the era of using the grey list as a shield is over. The banking sector has breathing room. Capital inflows can accelerate. The pressure shifts to delivery. Companies that want to scale will find capital if they present credible strategies. Those that rely on policy excuses are out of runway.
Hospitality and tourism should move fastest. Grey listing sat quietly in the background of many investment decisions. Now it is gone. Global hotel groups and funds are scouting aggressively across emerging markets. Dubai, Saudi Arabia, Rwanda, and Mauritius are offering speed, security, and seamless aviation access. South Africa has world class natural product and brand power, but that has never been the issue. Investors will not commit if airports are constrained, visas are unpredictable, services collapse in key nodes and crime undermines visitor confidence. This sector has the chance to reassert itself as Africa’s premium destination for luxury, business travel, and experience-based tourism. It must modernise, build partnerships and lobby aggressively for better enabling conditions. If not, capital will simply build the next resort elsewhere.
I have just returned from the UAE-Africa Invest Summit, the Future Hospitality Summit in Dubai, and the Skift Global East Forum in Abu Dhabi, and the contrast is sobering. There, governments, and private capital are moving in lockstep to build the next era of global travel. Billions are being deployed into new districts, cultural precincts, aviation expansion, sustainable tourism corridors, and talent pipelines. The pace is relentless, and the ambition is unapologetic.
This is where government’s role becomes decisive. Policy certainty is the single most powerful form of capital attraction. Investors do not expect incentives; they expect consistency. The tourism and leisure sectors are deeply dependent on long-term policy signals – from visa frameworks and aviation access to infrastructure and land-use clarity. When government provides a predictable regulatory environment, capital can price risk accurately, partnerships can be structured efficiently, and projects can scale faster.
South Africa’s policymakers should recognise that stability, transparency, and credible timelines are themselves investment tools. The countries winning the race for tourism capital – from the Gulf to East Africa – are those where government acts as an enabler, not a bottleneck. South Africa can do the same, but only through disciplined coordination between the public and private sectors.
Investors from Europe, the Gulf and Asia are looking to Africa for the next frontier. They will not hesitate to invest here, but they will not tolerate hesitation, policy drift, or basic infrastructure failure. South Africa has the product to compete at the top of the global hospitality table. It simply must decide whether it has the urgency and execution to do so.
Government now carries the heaviest burden. Delisting is conditional on continued enforcement. The world is watching. If prosecutions stall, if politically exposed persons skate past scrutiny, if beneficial ownership systems fall apart, confidence will evaporate. The FATF can put you back on the list faster than it took to get off it.
South Africa’s structural weaknesses remain untouched by this development. Power reliability, Transnet capacity, crime, and corruption continue to depress appetite. Delisting clears one hurdle. The race has barely begun. Progress must now show up in electricity availability, functioning rail and port systems and visible action against corruption.
The next twelve months matter more than the last two years. Treasury, the Reserve Bank, and the private sector must treat this as a narrow window to reintroduce the country to global capital markets. That means a pipeline of bankable infrastructure projects, clear fiscal direction and an honest communication strategy that shows delivery, not promises. The country needs its best business leaders and financial institutions telling a unified story backed by measurable progress.
Institutional investors are not sentimental. They are hunting for yield and stability. They have options. Many emerging markets offer higher growth, lower operational risk, and faster policy execution. South Africa does not win by asking for patience. It wins by proving it can deliver.
Business cannot wait for government. The companies that move now to secure partnerships, raise capital, and expand capacity will set the pace. Those that hesitate will be left behind.
This is a moment of clarity. South Africa has been given another chance. Not a victory, not a reward, but an opening. What happens next will determine whether the country attracts capital or continues to talk about unrealised potential.
Investors will not wait forever. Neither should we.
Hamza Farooqui is a South African entrepreneur and investor who builds bridges between global brands and emerging markets. As the founder and CEO of Millat Group, he leads investments across hospitality, retail, and helping international partners tap into Africa’s growth story. Hamza is also a World Travel and Tourism Council Executive Member.
