BREAKING: FATF Removes Nigeria From Global Money Laundering Watchlist

Global watchdog, Financial Action Task Force, on Friday said it has removed Nigeria from its grey list, ending nearly three years of being tagged a destination for dirty money and signaling a boost for investor confidence in the nation’s economy

Nigeria was removed from the list alongside South Africa, Burkina Faso, and Mozambique after their governments stepped up efforts to combat money laundering and terrorist financing.

South Africa and Nigeria were added to the grey list in February 2023, while Mozambique was added in October 2022, and Burkina Faso was originally designated in February 2021.

What It Means For Nigeria
Nigeria’s exit from the FATF grey list represents a confidence boost for its financial system and broader economy.

Being on the list often increases the cost and complexity of cross-border transactions, as global financial institutions impose tighter scrutiny and compliance checks.

With its removal, Nigeria can expect smoother and cheaper international transactions, including remittance inflows that average around $20 billion annually.

Finance Minister Wale Edun hailed the development as a vote of confidence in Nigeria’s reform efforts.

“This development reinforces confidence in our economy and the integrity of our monetary and financial systems, signaling to investors and global partners that Nigeria’s institutions are strong, transparent, and internationally trusted,” Edun said in a message shared before the announcement.”

“It will ease cross-border transactions, improve capital flows, including foreign direct investment, and strengthen the foundations for rapid and sustainable economic growth and job creation,” he added

The move is also expected to enhance Nigeria’s attractiveness to foreign investors, particularly those in sectors such as energy, technology, and manufacturing, where compliance risks had previously been a barrier to entry.
Improved investor sentiment could bolster the naira, encourage capital inflows, and support the government’s broader fiscal and monetary reforms.

What You Should Know

The FATF Grey List is a list of countries under increased monitoring that are working with the Financial Action Task Force to address strategic deficiencies in their systems for combating money laundering, terrorist financing, and proliferation financing.

Being on the list means a country has made a political commitment to resolve its identified weaknesses within an agreed timeframe, but it can result in negative economic and reputational impacts.

Earlier in February this year, the Chief Executive Officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), Ms. Hafsat Bakari, had announced that Nigeria was expected to exit the FATF grey list by late 2025.

Bakari highlighted that exiting the grey list of jurisdictions under increased monitoring would mark significant progress for Nigeria and reinforce the country’s commitment to a more transparent financial environment.
She noted the approval of Nigeria’s fifth progress report by the FATF as a substantial achievement.

The approval represents a milestone in Nigeria’s efforts to strengthen its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) framework, demonstrating the country’s adherence to international standards in combating financial crime.

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