AfriForum Sakenetwerk warns: New capital regulations could further stifle economic freedom

If the proposed Draft Capital Flow Management Regulations of 2026 are adopted in their current form, it will lead to further government control over businesses, investors and legally acquired assets. This is the gist of AfriForum Sakenetwerk’s comments submitted to the National Treasury.

Although AfriForum Sakentewerk supports the fight against money laundering, fraud and illegal financial activities, this goal cannot be presented as a reason to impose excessive government powers, unclear decision-making and further administrative burdens on legitimate businesses.

“These regulations create the dangerous impression that the government is increasingly seeking to control the movement of legal capital. This is exactly the kind of uncertainty that deters investors, frustrates entrepreneurs and stifles economic growth,” says Marnus Kamfer, Law and Risk Manager at AfriForum.

According to AfriForum Sakenetwerk, the broad discretionary powers granted to the government are particularly worrying. The proposed regulations provide for, among other things, the approval or prohibition of transactions, the granting or withdrawal of exemptions, as well as the freezing, seizure and possible forfeiture of assets. Without clear, objective and predictable criteria, this poses serious risks to legal certainty and property rights.

AfriForum Sakenetwerk further warns that the regulations could reinforce the perception that South Africa is moving away from an open and competitive economy towards a more restrictive capital control environment. This comes at a time when the country is in urgent need of investment, export growth, entrepreneurship, and job creation.

“The government cannot, on the one hand, try to attract investors and, on the other hand, introduce regulations that make investors wonder whether they will be able to freely manage their own money and assets,” adds Corné Cronjé, AfriForum’s Head of Community Building.

AfriForum Sakenetwerk is also concerned about the impact that the proposed requirements could have on small and medium-sized enterprises. Many of these enterprises do not have separate compliance departments and are already struggling with increasing regulatory pressure, high costs and a weak economic climate.

The network has requested the National Treasury to reconsider the regulations and ensure that any measures against illegal financial activities do not harm legitimate trade, investment, innovation, and capital formation.

“Economic growth is not built by burdening entrepreneurs with more red tape, uncertainty, and government interference. The country needs fewer barriers and more trust,” concludes Cronjé.