PRETORIA: South Africa has proposed a sweeping overhaul of its decades-old rules governing money flows, aiming to bolster its position as a financial hub for Africa and attract more investor capital.
The finance ministry’s proposals include raising discretionary offshore allowances for individuals, regulating crypto assets and easing capital-flow restrictions. The Johannesburg Stock Exchange estimates the changes could attract at least 10 trillion rand (US$608bil) in investment over time.
Much of the legislation being overhauled dates back to 1961, with some provisions originating as early as 1933, Vukile Davidson, deputy director-general of financial policy at National Treasury, said.
“At the time, exchange control was principally used to deal with a wide range of issues beyond just capital flows management.
“It was used to manage the domestic revenue base, to manage illicit flows, to ensure the stability of the financial sector,” Davidson added.
That blunt instrument is now being replaced with more targeted reforms, he said,
A key aim of the overhaul is to address long-standing structural problems that have seen South Africa lose financial capital to rival hubs.
Asset managers for the first time would be allowed to run non-rand funds from a South African base. — Reuters
