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South Africa’s Finance Minister, Enoch Godongwana, has dismissed claims that the country is facing a fiscal crisis, attributing the government’s tight fiscal conditions to the legacy of former president Jacob Zuma.
Speaking on Tuesday during deliberations on the Adjustments Appropriation Bill, Godongwana welcomed the National Treasury’s announcement that South Africa has been removed from the European Union’s list of high-risk third-country jurisdictions.
The development follows the Financial Action Task Force’s decision last year to remove the country from its grey list.
Godongwana said South Africa’s inclusion on both lists was the result of extensive damage caused by state capture, noting that the effects of such governance failures take time to reverse.
He explained that Treasury has been working to repair the harm done during previous administrations, particularly under Zuma, describing the process as lengthy and politically costly.
“We are not in a fiscal crisis, as somebody has said here. Fiscal consolidation is beginning to bear fruit. The battle to tighten its anti-money laundering and terrorist financing legislation led to South Africa being Grey-listed.
“When damage is done, it’s got a time lag to repair that damage. It’s taken us the whole of the time and costing us votes due to the damage made under the Zuma years.”
The minister added that fiscal consolidation efforts were beginning to yield results, with progress being made in reducing national debt and lowering borrowing costs to prevent long-term strain on future generations.
He also pointed to reforms in anti-money laundering and counter-terrorism financing laws as key factors behind the country’s improved standing.
South Africa is expected to be formally removed from the EU’s high-risk list at the end of the month, alongside Burkina Faso, Mali, Mozambique, Nigeria and Tanzania.
