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The Financial Action Task Force (FATF) last week removed Nigeria from its grey list of countries subject to increased monitoring for money laundering and terrorist financing risks. According to the Central Bank of Nigeria (CBN), the country’s delisting will deliver tangible benefits for businesses and households alike, including lower compliance costs, improved access to international finance, and faster, more affordable cross-border transactions, reports Assistant Editor COLLINS NWEZE Nigeria’s exit from the Financial Action Task Force (FATF) grey list marks a major milestone with significant economic benefits. For stakeholders, particularly businesses and bank customers, this development is expected to boost investment inflows, ease the process of opening foreign bank accounts, and enhance the naira’s competitiveness in global markets. Nigeria, which had been on the FATF grey list since February 2023, successfully exited following far-reaching financial sector reforms led by Central Bank Governor Olayemi Cardoso and other key stakeholders. Their coordinated efforts strengthened compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) standards, bringing Nigeria’s financial system in line with global best practices. For over two years, the country faced the heavy consequences of grey listing, which restricted access to global financial markets and eroded investor confidence. Countries on the FATF watch list typically experience heightened scrutiny of cross-border transactions, as dealings with them are deemed high-risk. This situation placed a significant burden on Nigerian businesses, citizens, and financial institutions. The FATF—a 40-member intergovernmental body backed by the World Bank and International Monetary Fund (IMF)—sets international standards to combat money laundering, terrorist financing, and other illicit financial activities. The Paris-based watchdog’s decision to delist Nigeria represents substantial progress, restoring global confidence, lowering the cost of capital, and strengthening the overall credibility and resilience of Nigeria’s financial system. Other countries removed from the list include, South Africa, Mozambique and Burkina Faso. “As of February 2025, the FATF has reviewed 139 countries and jurisdictions and publicly identified 114 of them. Of these, 86 have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process,” the report said. FATF identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation. “For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country,” it said. By closing gaps in regulatory oversight and enhancing enforcement against illicit financial flows, the four nations have now met the FATF’s requirements for delisting, boosting their standing among global financial institutions and capital markets. Nigeria and South Africa were added to the list in February 2023 while Mozambique was included in October 2022 and Burkina Faso initially in February 2021. CBN welcomes FATF decision The CBN said it welcomes the FATF formal announcement of Nigeria’s removal from the list of jurisdictions under increased monitoring, known as the “grey list.” It said the decision followed a successful on-site evaluation of reforms implemented across the financial system. “The FATF decision recognises significant improvements in Nigeria’s regulatory, supervisory, and enforcement frameworks, particularly in combating money laundering, terrorist financing, and proliferation financing, it marks an important milestone in the country’s continuing efforts to strengthen financial system integrity, transparency, and international confidence,” the apex bank said. The FATF’s decision follows a two-year reform programme coordinated by the Federal Government of Nigeria, involving multiple agencies including the CBN, the Federal Ministry of Justice, the Nigerian Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC). The CBN’s contribution centred on enhancing supervision, governance and transparency across the financial system. Key reforms assessed by the FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA, FATF’s regional assessment body, included strengthened oversight of financial institutions through updated AML/CFT regulations, risk-based supervision, and fit-and-proper assessments. There was also expansion of compliance reporting and monitoring across remittance channels, bureaux de change, and fintech platforms to improve traceability and transparency. “Enhanced inter-agency data-sharing and enforcement coordination between the CBN, NFIU, EFCC, and law-enforcement bodies. Implementation of market governance tools, including the Foreign Exchange Code (FX Code) and Electronic Foreign Exchange Matching System (EFEMSI),” the apex bank said. Together, these measures have materially strengthened Nigeria’s compliance with global standards and reinforced confidence in the integrity of its financial system. It said Nigeria’s removal from the grey list will yield tangible benefits for businesses and households alike including lowering compliance costs, improving access to international finance, and making cross-border transactions faster and more affordable. In time, these gains will translate into smoother trade settlements, quicker remittance inflows, and even more predictable access to foreign exchange enhancing livelihoods, supporting enterprise growth, and deepening financial inclusion. The FATF decision reinforces the broader restoration of global confidence in Nigeria’s economic management. Recent international assessments underscore this momentum, with Moody’s and Fitch upgrading Nigeria’s ratings outlook on the back of stronger external balances, credible policy execution, and renewed monetary-policy credibility. Similarly, the IMF’s 2025 Article IV Consultation highlighted improved reserve adequacy, greater transparency, and a reform agenda increasingly aligned with global standards. Commenting on the announcement, Cardoso said: “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system. It reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.” CBN’s milestone contributions On assumption of office, the leadership of the CBN led by Cardoso swung into action, dismantling the roadblocks and opaqueness in the financial system that put Nigerian on the list. From reforms in the bureau de change operations, which falls within the other financial sector segment of the economy, to the increase in surveillance and supervision of the deposit money banks, the CBN under Cardoso left no stone unturned to ensure that Nigeria exits the grey list. Under Cardoso, the CBN ensured that the banks met the FATF 40 recommendations, including ensuring that the lenders identify their customers and verify customer’s identity using reliable, independent source documents, data or information. Part of the compliance records include Nigeria’s lenders being able to identify the beneficial owner, and taking reasonable measures to verify the identity of the beneficial owner, such that they become satisfied that beneficial owner in every transaction is known. As required by the law, the Nigeria’s financial institutions are also able to understand the ownership and control structure of their customers, obtain information on the purpose and intended nature of the business relationship and conduct due diligence on the business relationship. They equally ensured that scrutiny of transactions are undertaken throughout the course of every banking relationship. President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, described Nigeria’s exit from the FATF grey list as good news and development, for the country. He praised the CBN’s efforts at ensuring that Nigeria is no longer burdened by the grey list challenges, following its exit. He said: “It opens new approach and opportunities in Nigeria banks and customers dealings with international financial institutions. It shows that Nigeria’s financial system is safe for payments and other transactions. It is worth celebrating by all Nigerians,” he said. Ogubunka advised that government should do more to ensure that Nigeria does not relapse, or return into the list by continuing to do things right and continuously complying with all the 40 recommendation set by the FATF. Views from other stakeholders Head Lagos Office at Inter – Governmental Action Against Money Laundering In West Africa (GIABA), Timothy Melaye, said the government of Nigeria has shown unwavering commitment to the implementation of AML/CFT measures in the country. Melaye spoke during the sensitisation seminar for organised private sector on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) organised by GIABA in Lagos. Melaye, who represented GIABA Director-General, Edwin Harris, disclosed that money laundering and terrorism financing pose considerable threats to global peace and security as well as destabilizing political and financial stability of any nation state. “Besides external resources, enormous funds are generated by terrorist networks through legal as well as illegal means, concealed and laundered using existing legal financial framework or unlawful underground networks. The terrorist networks cannot be destroyed, or even made ineffective, unless concerted efforts are made at both national and international levels to efficaciously block their financial sources. The promotion of well-regulated financial systems and services is central to any effective and comprehensive AML/CFT regime,” he said. Read Also: Nigeria turning towards prosperity According to him, Money Laundering (ML) and the Financing of Terrorism (FT) is increasing in sophistication, inherently transnational, and increasingly linked to organised crime, posing a growing threat to consumers, business, and government alike. Also speaking during the event, President / Chairman, Compliance Institute Nigeria, Pattison Boleigha, described the grey list as terminology that is coined by the FATF, which is generally made up of countries from highly developed economies to check the spate of crime and the abuse of the financial system. According to him, the signatories to the FITF are expected to guide countries on how to put legislation in place in their various countries to fight money laundering, terrorism financing and lately, proliferations of weapons of mass destruction. He said not meeting the FATF recommendations has some dire consequences on the business environment, including having Nigeria’s name published across the whole world as country that is not doing enough to fight financial crime, difficulties in business consummation and lack of trust from foreign investors. “In addition to that, our financial system suffers a lot because correspondent banks will not want to do business or open correspondent banking relationships with our banks and other financial institutions,” he added. Understanding FATF Rules “In total, more than 200 countries and jurisdictions have committed to implement the FATF’s Standards as part of a co-ordinated global response to preventing organised crime, corruption and terrorism. Countries and jurisdictions are assessed with the help of nine FATF Associate Member organisations and other global partners, the IMF and World Bank,” it said. In a report on its website, the Financial Action Task Force (FATF) said it identifies jurisdictions with weak anti-money laundering and counter-terrorist financing (AML/CFT) measures in two public documents released three times a year. FATF’s process for publicly listing countries with weak AML/CFT regimes has proven effective. The organisation researches methods of money laundering and terrorist financing, promotes global standards to mitigate related risks, and evaluates whether countries are taking effective measures to address them. “The FATF’s decision-making body, the FATF Plenary, meets three times per year and holds countries to account if they do not comply with the Standards. If a country repeatedly fails to implement FATF Standards then it can be named a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction. These are often externally referred to as “the grey and black lists,” it said.
