South Africa is suffering a death by 1,000 cuts from repeated own goals, such as the country’s elevated load-shedding levels, logistical inefficiencies, and financial greylisting.
Standard Bank CEO Sim Tshabalala told Newzroom Afrika that the negative impact of repeated missteps by South Africa is adding up and will make it more difficult for the country to grow.
Tshabalala singled out greylisting, in particular, as significantly impacting Standard Bank’s operations on the continent.
Greylisting makes it more challenging to do correspondent banking with global partners as “we are getting more and more questions”, Tshabalala said.
It has become more complex to do regular trade transactions as partner banks require more forms and more paperwork. This makes these transactions less efficient and more expensive for Standard Bank.
Correspondent banks are forced to ask more questions of South African banks and companies performing international transactions as regulation pushes them to gather more information now that South Africa is on the Financial Action Task Force’s greylist.
Issues such as greylisting “are a death by 1,000 cuts – they all add up”, Tshabalala said.
“Things that are negative about our country and diminish our status are happening slowly, but they add up. Greylisting is but one in a long list of things that create a negative perception of South Africa.”
Tshabalala also called on South Africa to get its house in order before it tries to compete or partner with other nations on the global stage.
“It makes sense for South Africa to look for ways of improving its ability to trade and invest between itself and its partners,” Tshabalala said.
However, this will not help South Africa succeed in a multipolar world unless it improves its infrastructure, enhances the performance of its logistics systems, and stabilises its electricity supply.
The country will also have to make it easier for people to get visas to travel to South Africa and, in particular, ensure skilled professionals can enter the country.
“The way to be able to compete and partner appropriately is to make sure that you have got your house in order,” Tshabalala said.
It has to be made easier to do business in South Africa and for people to be economically active.
“It is very important for South Africa to partner with like-minded states, but it is also important to be competitive. We are competing for resources out there, and the competitors are not going to do us favours. We have to get competitive.”
The key is economic growth. “We are growing at 0.8%. Other countries are growing much faster. Where do you think that money is going to go? It will go to other countries, not South Africa,” said Tshabalala.