Greylisting may hinder Namibia’s economic growth

Josef Sheehama

The decision by the Financial Action Task Force (FATF) to greylist Namibia has raised fears over the country’s ability to fight money laundering, terrorism and illicit financial flows.

Namibia was greylisted on Friday after being monitored for some time.

Greylisting means that a country is under increased monitoring by the FATF due to certain deficiencies in its anti-money laundering (AML), combating the financing of terrorism (CFT) and proliferation financing (CPF) framework.

Economist Josef Sheehama says the greylisting may hinder Namibia’s economic growth and development.

“Also, the global correspondent banks involved in transactions with Namibia’s entities are likely to demand a higher level of due diligence. This is positive in that it will necessitate greater documentation and transparency within countries financial systems, helping to improve AML/CFT practices in general,” Sheehama says.

He adds that banks will have to enhance their own compliance procedures.

“This will affect cross border capital flows, especially for the trade sector. Documentary requirements for export and import payments, such as letters of credit, may become more challenging to fulfil, potentially raising costs and hampering business for companies engaged in trade,” Sheehama says.

Sheehama adds that the greylisting changes will make Namibia’s foreign-exchange control regime more restrictive.

The greylisting should serve as a wake-up call for policymakers, regulators and law enforcement agencies to convince the country’s international counterparts that it is worth their effort to maintain relationships, as Namibia continues to build a more robust legal and compliance framework to remain competitive on the global stage.

There are approximately 26 active countries greylisted as of June 2023, as per the FATF Grey List.

“Furthermore, the FATF indicates that as of October 2023, a total of 129 countries were reviewed and publicly identified 102 of them. A total of 76 countries have diligently addressed their AML and CFT weaknesses, leading to their removal from the process. For Namibia, the greylisting is not the end of the world, despite failing to implement all 72 recommended actions,” he says.

Economist Omu Kakujaha-Matundu says being greylisted is somewhat better than being blacklisted.

“As your financial system is brought under increased monitoring, it could slow foreign direct investment (FDI). With Namibia’s attempts to attract FDI in oil and gas, as well as green hydrogen, greylisting could be deleterious for the economy. It seems Namibia has no other option but to work tirelessly to address the few remaining FATF measures so that it can get off the grey list. That can be done and I don’t think there’s a real threat for Namibia to be blacklisted,” he said.


Central bank governor Johannes !Gawaxab says the issue of Namibia being greylisted is being treated with urgency and reassured the country that action has already been taken to avoid blacklisting.

“Recognising the urgency of the situation, the National Focal Committee, comprising representatives from public and private sector stakeholders, will enable an execution plan to execute the FATF-prescribed action plan and ensure the timely address of the outstanding action items. This comprehensive approach ensures coordinated efforts to strengthen Namibia’s AML/CFT/CPF regime and restore international confidence in Namibia’s financial system,” !Gawaxab says.

He adds that Namibia’s financial system remains sound, stable and well-capitalised even after the greylisting.

“With robust due diligence measures in place, transactions between Namibia and the global community will continue to be safeguarded.

Businesses and citizens can proceed with confidence in conducting transactions internationally. Moving forward, we are resolute in our commitment to closing the identified gaps swiftly, taking cues from neighbouring countries that have effectively managed similar situations. We remain positive and enthusiastic about the future of Namibia’s financial system,” he says.


In 2022, Namibia underwent a second mutual evaluation by the FATF in which shortcomings in both technical (laws) and effectiveness (implementation) compliance were identified.

This prompted the FATF to provide the country with a 12-month period for remediation, which concluded in October 2023.

Namibia is tasked alongside other United Nations member states to actively and effectively prevent and CML, CTF and CPF.

These obligations aim to safeguard the integrity and stability of the financial system and contribute to overall safety and security.

According to a report by the National Treasury of South Africa, it takes from one to three years for countries to address the deficiencies and to be taken off the grey list, something that occurs after a final on-site assessment when both FATF and the relevant country believe that all elements of the action plan have been largely or fully addressed.


Finance and public enterprises minister Iipumbu Shiimi says since December 2022, Namibia has been diligently working towards meeting international standards set forth by the Eastern and Southern African Anti-Money Laundering Group and the FATF.

“I wish to emphasise the government’s unwavering dedication to addressing the remaining action items. Strengthening legal and regulatory frameworks remains paramount, not only to combat financial crimes but also to bolster national development initiatives,” he says.

According to Shiimi, preliminary indications reveal that Namibia passed the technical compliance test and made progress in five out of the 11 immediate outcomes on the effectiveness test. In addition, he says, 59 out of 72 action items were successfully addressed, with only 13 remaining.

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