{"id":22745,"date":"2023-02-26T14:26:43","date_gmt":"2023-02-26T14:26:43","guid":{"rendered":"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy"},"modified":"2023-02-26T16:48:25","modified_gmt":"2023-02-26T16:48:25","slug":"sa-greylisting-will-hit-hard-on-eswatinis-economy","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy","title":{"rendered":"SA greylisting will hit hard on Eswatini\u2019s economy"},"content":{"rendered":"

Africa-Press – Eswatini. <\/strong><\/span>Based on the connectedness of the Eswatini economy to that of South Africa, the Kingdom will suffer the same catastrophic effects as the Republic because the two economies are integrated. <\/b><\/p>\n

South Africa and Nigeria were grey listed by the Financial Action Task Force (FATF) on Friday. The move by the intergovernmental body that sets global standards to combat money laundering and terrorist financing puts these countries alongside countries such as Mozambique, Syria, Yemen and Haiti.<\/p>\n

According to reports, FATF\u2019s decision signals to global banks, financial institutions and investors that these countries are not fully compliant with anti-money laundering and terrorist financing standards.<\/p>\n

An economic expert who asked not to be named said it is important to note that Eswatini, South Africa, Lesotho and Namibia are linked by the Common Monetary Area, a monetary union that allows a free flow of capital among the states as their currencies are valued and exchanged at par with the South African Rand.<\/p>\n

\u201cI would say through the integration of our economies, we would suffer more from this development. Unfortunately, we have our own anti-money laundering issues, which means we are not too far from a greylisting ourselves and the reports reflect that. That, coupled with the currency union arrangement, through the CMA, would mean that we too struggle to attract capital flows into the country,\u201d the expert said.<\/p>\n

He went on to say that because Eswatini hosts a lot of South African companies, which fund themselves through the South African capital market, they would find themselves having a difficulty borrowing internationally for their investment because of the greylisting.<\/p>\n

\u201cWe may also see our economy slowing down considerably,\u201d the expert said.<\/p>\n

Again, the seasoned economist noted that based on the free flow of capital in the monetary union, Eswatini would also technically be greylisted as it would be seen as a beneficiary of the illicit money.<\/p>\n

\u201cOur capital markets are integrated and therefore there is no insulating of ourselves from a South Africa greylisting,\u201d said the economic expert.<\/p>\n

The economist went on to say that even though no studies have been done to confirm this, \u201cwhen South Africa attracts foreign capital flows it automatically benefits Eswatini, mainly through increased trade. Therefore, if South Africa is struggling to attract capital, it won\u2019t grow at meaningful rates and that would directly impact Eswatini.\u201d<\/p>\n

Furthermore, Eswatini\u2019s economy will be weakened as South African banks will now be restricted to make cross-border transactions which will hamper imports and exports. As South Africa will struggle with its imports, Eswatini will automatically be negatively impacted as it will also struggle to source some of the basic commodities produced in South Africa.<\/p>\n

Eswatini imports over 80 per cent of its goods and services from the republic. This effectively means the greylisting South Africa will not be able to easily source raw materials from overseas countries for the manufacturing of the finished goods which eventually find their way into Eswatini.<\/p>\n

South Africa is facing these threats:<\/p>\n

\u2022 Higher transactional, administrative, compliance, auditing and funding costs for banks operating in South Africa, which would face increased inspections by regulatory authorities.<\/p>\n

\u2022 South Africa may be placed on the European Union\u2019s blacklist and the United Kingdom\u2019s list of high-risk countries.<\/p>\n

A high-risk classification means access to commercial loans, Internal Monetary Fund (IMF) borrowing and financial aid would be limited, or more stringent access requirements imposed.<\/p>\n

Banks\u2019 ability to conduct cross-border transactions would be restricted, hampering imports and exports, which can lead to a decline in gross domestic product. While banks and other financial institutions would not be immediately shut out of international markets, over the medium to long term, the impact on South Africa\u2019s economy and financial system would become progressively worse.<\/p>\n

For More News And Analysis About Eswatini<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Eswatini. Based on the connectedness of the Eswatini economy to that of South Africa, the Kingdom will suffer the same catastrophic effects as the Republic because the two economies are integrated. South Africa and Nigeria were grey listed by the Financial Action Task Force (FATF) on Friday. The move by the intergovernmental body […]<\/p>\n","protected":false},"author":84,"featured_media":22744,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,6],"tags":[234,248,249],"class_list":["post-22745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-files","tag-africa-press","tag-africa-press-eswatini","tag-eswatini"],"yoast_head":"\nSA greylisting will hit hard on Eswatini\u2019s economy - Eswatini<\/title>\n<meta name=\"description\" content=\"Based on the connectedness of the Eswatini economy to that of South Africa, the Kingdom will suffer the same catastro ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SA greylisting will hit hard on Eswatini\u2019s economy\" \/>\n<meta property=\"og:description\" content=\"Based on the connectedness of the Eswatini economy to that of South Africa, the Kingdom will suffer the same catastro ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\" \/>\n<meta property=\"og:site_name\" content=\"Eswatini\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-02-26T14:26:43+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-02-26T16:48:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/eswatini\/sites\/33\/2023\/02\/postQueueImg_1677412722.13.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"SA greylisting will hit hard on Eswatini\u2019s economy\",\"datePublished\":\"2023-02-26T14:26:43+00:00\",\"dateModified\":\"2023-02-26T16:48:25+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\"},\"wordCount\":641,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/eswatini\/sites\/33\/2023\/02\/postQueueImg_1677412722.13.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Eswatini\",\"Eswatini\"],\"articleSection\":[\"all news\",\"files\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\",\"url\":\"https:\/\/www.africa-press.net\/eswatini\/all-news\/sa-greylisting-will-hit-hard-on-eswatinis-economy\",\"name\":\"SA greylisting will hit hard on Eswatini\u2019s economy - 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