Reitumetse Makwea

By Reitumetse Makwea

Journalist


Phala Phala report: SA may be greylisted if Ramaphosa doesn’t resign

Finance Minister said Ramaphosa's exit would not change the country's economic policy.


While many experts have presumed President Cyril Ramaphosa’s possible resignation would definitely have a devastating impact on SA’s economy, with the rand tanking and financial stocks plummeting, some have argued the president’s action has increased the risk of SA being greylisted because we can’t be trusted on money-laundering controls.

‘Cyril has done the worst’

Economic and political analyst Tshepo Kgadima said Ramaphosa’s exit would not tank the country’s economy as it was already at a pivotal point.

“Cyril has done the worst he could ever do, if you have a president who is involved in money laundering you can’t help but wonder who else is involved”.

SA loses more than $10 billion to money laundering

“According to an independent report by Africa Union, SA loses more than $10 billion to money laundering which comes in the form of transfer pricing and profit shifting,” he added.

“So if the president can do what Ramaphosa did on Phala Phala, it confirms what former President Thabo Mbeki said about money laundering, now when you don’t arrest him you have just told the world; ‘here’s a free for all, because your proximity will shield you from ever taking responsibility”.

NOW READ: Disbanded MKMVA wants Ramaphosa to ‘fall on his own sword’ and ‘just resign’

Greylist

Kgadima said if the Financial Action Task Force (FATF) turns a blind eye on the alleged transgressions and of the president it would be the end, as they await further action and then subsequently greylist the country.

In their note published by a global legal practice Dentons, Jesse Prinsloo and Davin said South Africa was subjected to an onsite visit by the FATF in October and November 2019, where the country was evaluated based on the FATF’s requirements.

“The FATF identified twelve key findings and recommendations required to strengthen the South African financial system, citing state capture, money laundering risks, law enforcement and judicial capacity as some of the key areas needing attention,” Prinsloo and Olen said.

“Beyond the theoretical, greylisting will create administrative and bureaucratic hurdles for international companies doing business in South Africa while simultaneously decreasing access to capital for existing companies and investment opportunities.

“Nevertheless, the impact of greylisting is still to be realised and the South African government does not necessarily need to satisfy all the recommendations posed by the FATF by October 2021.

‘Everyone is equal before the law’

Furthermore, Kgadima said the FATF would have no choice but to greylist SA if “we fail to observe the constitution, because it clearly states; everyone is equal before the law, the moment you say Cyril is not equal before the law… then who else can you tell that SA has got a rule of law”.

“There’s no more rule of law, the moment you let Cyril walk scot free,” Kgadima told The Citizen.

“And when the law enforcement agencies cannot act without fear or favour or prejudice the moment they show favouritism which is what they have done now then that would be the end of the republic.”

Finance minister weighs in

Finance Minister, Enoch Godongwana yesterday said Ramaphosa’s exit would not change the country’s economic policy.

In an interview with Bloomberg Television Godongwana said, “any president is not going to pursue individualistic policies outside the framework of the party”.

“We are used to this kind of disruption and we have always found ways of managing it… It’s noisy, it is our nation.”

With the uncertainty around Ramaphosa’s fate Business Unity SA CEO Cas Coovadia said SA needed a clear direction within the next few days, “so that a clear message is sent to citizens, investors, and others that authorities are able to respond decisively to this crisis”.

“The critical issue now is for Parliament to move with haste.”

Meanwhile, the GOOD party said Ramaphosa should not contemplate, or be bullied into resigning “on the basis of the untested findings of the Independent Panel, if reports are to be believed, Ramaphosa was on the verge of resigning yesterday, and is still contemplating doing so. That would be premature”.

GOOD Secretary-General & Member of Parliament Brett Herron said, “rather, if he has broken any laws, he must face the legal and Constitutional consequences.”

ALSO READ: Ramaphosa’s people won the first round – Malema

reitumetsem@citizen.co.za

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