Greylisting not an indictment on SA’s financial sector but a call to turn policy into decisive action
26 Apr, 2023

Daniel Mminele, Alexforbes chair and Nedbank chairman-designate


Earlier this year, South Africa’s greylisting raised concerns about the state of the country’s financial institutions, its policies on financial crimes and the health of its investment environment. South Africa’s greylisting is however not an “indictment on the banking sector”, but rather a symptom of other parts of the system that have not adequately addressed and mitigated the risks surrounding financial crime.


This is according to Daniel Mminele, the most recent guest on a series of webinars entitled Think Big. The series, hosted by PSG and facilitated by award-winning journalist, Alishia Seckam aims to highlight some of the most pressing issues facing South Africans and to allow for open engagement on important topics.


Mminele was recently appointed to the role of independent non-executive director and chairman-designate at Nedbank. He is the outgoing chair of Alexforbes and joins the bank having served as the head of President Ramaphosa’s Climate Finance Task Team. He is also most commonly recognised as the former Deputy Governor of the South African Reserve Bank – a role in which he served two consecutive five-year terms.


As such, Mminele’s perspective on the credibility of South Africa’s financial sector, with particular reference to its recent greylisting, is informed by extensive expertise and knowledge on the inner workings of several key industry-leading institutions. The recent findings of the Zondo Commission brought the magnitude of state capture into stark focus. Widespread and entrenched corruption have been compounded over time, by the inability to turn policy into proactive action against rampant money laundering. For Mminele, these are the key issues which lie at the crux of the problem. Greylisting was therefore a call to action – one that requires a firm resolution by public and private sector leaders to implement fast, targeted solutions.


Mminele says SA’s financial sector drew valuable lessons from the 2008 global recession, having solidified its regulatory and supervisory structures. Being well capitalised to absorb losses better and maintaining good liquidity were strategies employed as buffers against future risks.


The implementation of Basel III since 2013 – a revised capital framework aimed at ensuring the continued soundness of the local banking systems – was another reform intended to bolster the regulatory and supervisory environment against impending risks.


As he explains: “The policies that will enhance the country’s reputation in the global arena are mostly in place. What is needed now is implementation. How quickly we react in working together towards a solution will determine investor sentiment, which will have a positive impact on the flow of foreign investment into the country and also support domestic investor confidence.” In Mminele’s opinion, banks remain vigilant and should be well-positioned to overcome the hurdles which lie ahead.


The webinar also raised the topical issue of whether the nationalisation of the South African Reserve Bank (SARB) is in the best interests of civil society and industry at large. On this “evergreen” issue, Mminele indicated that a mere change in shareholding structure would not result in any influence or control over the key responsibilities of the Bank as they relate to monetary policy, financial stability, prudential supervision, oversight of the payments system or the monopoly right of issue when it comes notes and coins. It was wrong to think that the nationalisation of the SARB would lead to a change in mandate or independence, both of which would require a constitutional amendment.


Its independence as one of South Africa’s most important institutional bodies does not give the Reserve Bank “free rein”, says Mminele. Rather, it affords the institution the privilege to act with professional objectivity, free from political influence.


There is therefore no real credence to the view of the SARB as being a “state within a state”. Instead, as Mminele concludes, “the best way to look at this issue is to understand that the SARB is independent within the broader system of economic governance but not independent of it.”






@Daniel Mminele
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