Nigeria’s FATF Delisting: Implications, Benefits and Recommendations

Nigeria’s recent exit from the Financial Action Task Force (FATF) Grey List marks a significant milestone in its fight against money laundering and terrorist financing. This achievement, a culmination of concerted efforts and reforms, carries profound benefits and implications for the nation’s economy, international standing, and future development. This article delves into these aspects, offering recommendations to sustain and build upon this positive momentum.

Introduction

On February 24, 2023, the FATF placed Nigeria on its grey list following a mutual evaluation report jointly conducted by the FATF and the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA). The evaluation highlighted several areas where Nigeria needed to strengthen its efforts in combating money laundering and terrorist financing.[1]

However, Nigeria’s inclusion on the grey list also signified that the country had committed to working closely with the FATF to address these gaps. The Nigerian government subsequently developed and began implementing an action plan within an agreed timeframe. Between 2023 and 2025, Nigeria submitted six progress reports demonstrating significant improvements in its AML/CFT framework.[2] After reviewing these reports, the FATF concluded that Nigeria had addressed the identified deficiencies. In August 2025, the FATF conducted an on-site visit to verify Nigeria’s progress, and at its October 2025 plenary, Nigeria was officially delisted from the grey list marking a major achievement for the country’s financial system.[3]

Benefits and Implications of Exiting the FATF Grey List

The immediate and most tangible benefit of exiting the Grey List is the enhanced reputation and credibility of Nigeria on the global stage. For years, being on the list signaled to international investors, financial institutions, and partners that Nigeria posed a higher risk for financial crimes.

Reacting to this milestone, Emomotimi Agama, the Director-General of the Securities and Exchange Commission (SEC), expressed optimism about the positive impact of the FATF decision, during a televised interview, he stated:

“It means so much for us in the capital market, it means so much to us in the financial system. It brings about something that we have been craving for – investor confidence.”[4] Indeed, Nigeria’s delisting from the FATF grey list signals a renewed sense of credibility and transparency in its financial operations. Some other benefits of exiting the FATF list are as follows;

Increased Foreign Direct Investment (FDI): Investors are naturally wary of jurisdictions with weak anti-money laundering/combating the financing of terrorism (AML/CFT) regimes, fearing their investments could be exposed to illicit financial flows or become subject to stricter scrutiny and compliance burdens. Exiting the Grey List significantly de-risks Nigeria in the eyes of foreign investors, potentially leading to increased FDI across various sectors.[5] The exit also solidifies Nigeria’s position as a more reliable and trusted partner within the global financial system, fostering deeper collaboration on financial intelligence, law enforcement, and other critical areas.

Improved Correspondent Banking Relationships: Financial institutions in countries on the Grey List often struggle to maintain correspondent banking relationships with global banks. These relationships are crucial for facilitating international trade, remittances, and other cross-border transactions. The exit will ease these pressures, ensuring smoother and more efficient international financial flows for Nigerian banks and their customers. Also, Nigerian businesses engaging in international trade will likely experience fewer hurdles, faster transaction processing, and potentially lower compliance costs.[6]

Enhanced Economic Growth and Job Creation: The cumulative effect of increased FDI and improved trade facilitation is a more robust and dynamic economy. This, in turn, can lead to the creation of new businesses, expansion of existing ones, and ultimately, more job opportunities for Nigerians.[7]

Validation of Reforms: The FATF’s decision serves as an independent validation of the significant legal, regulatory, and institutional reforms undertaken by Nigeria. This acknowledgment can boost the public’s confidence in the government’s commitment to good governance and financial integrity.[8]

Implications of Exiting the FATF Grey List

While the benefits are substantial, Nigeria’s exit from the Grey List also carries several important implications that Nigeria must carefully manage, these implications are listed as follows;

Sustained Vigilance and Commitment: The exit is not an end but a new beginning. Nigeria must demonstrate sustained political will and operational effectiveness in implementing its AML/CFT framework. Any backsliding could jeopardize its hard-won progress and risk re-listing.[9]

Increased Scrutiny on Effectiveness: The FATF’s focus has shifted from merely having laws in place to demonstrating their effective implementation. Nigeria will now be under continuous scrutiny to show tangible results in investigating and prosecuting money laundering and terrorist financing cases, confiscating illicit assets, and preventing the abuse of its financial system.[10]

Recommendations, Moving Forward

To leverage the benefits and effectively manage the implications, Nigeria must adopt a forward-looking strategy based on continuous improvement and strategic investment. Some of these strategies are as follows;

1. Strengthen Institutional Capacity and Coordination:

Adequate Funding and Resources: Ensure that all AML/CFT agencies (e.g., EFCC, ICPC, NFIU, CBN, NDLEA) are adequately funded, equipped with modern technology, and staffed with highly trained professionals.[11]

Enhanced Inter-Agency Collaboration: Foster seamless information sharing and operational coordination among all relevant agencies to ensure a holistic and effective approach to tackling financial crime. Regular joint training and operations should be standard practice.[12]

Performance Metrics and Accountability: Develop robust performance metrics for AML/CFT agencies and hold them accountable for achieving tangible results in investigations, prosecutions, and asset recovery.[13]

2. Address Emerging Risks and Technological Advancements:

Regulate Virtual Assets: Develop a comprehensive regulatory framework for virtual assets (cryptocurrencies) to mitigate their misuse for illicit purposes, while also harnessing their potential for legitimate innovation.[14]

Combat Cyber-Enabled Financial Crime: Invest in advanced cybersecurity infrastructure and expertise to counter the growing threat of cybercrime and its nexus with money laundering and terrorist financing.[15]

3. Strengthen Private Sector Compliance and Engagement:

Capacity Building for Private Sector: Provide ongoing guidance, training, and awareness programs for financial institutions to ensure they understand their obligations and can effectively implement risk-based AML/CFT measures.

Promote a Culture of Compliance: Encourage a strong ethical and compliance culture within the private sector, emphasizing the critical role businesses play in protecting the integrity of the financial system.[16]

4. Sustain Political Will and International Cooperation:

High-Level Political Commitment: Maintain consistent high-level political commitment to AML/CFT reforms, demonstrating that financial integrity remains a national priority regardless of political changes.

Active International Engagement: Continue to actively engage with FATF, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), and other international partners to share best practices, seek technical assistance, and contribute to global efforts against financial crime.[17]

Conclusion

Nigeria’s exit from the FATF Grey List is a momentous achievement, signaling a renewed commitment to combating financial crime and safeguarding its financial system. This success offers a unique opportunity to attract significant investment, stimulate economic growth, and enhance Nigeria’s global standing. However, the path ahead demands sustained vigilance, strategic investment in human and technological resources, and unwavering political will. By continuously strengthening its AML/CFT framework, adapting to evolving threats, and fostering robust public and private sector collaboration, Nigeria can solidify its position as a responsible and trusted player in the global financial arena, ensuring that the benefits of this milestone are realized for generations to come.

FOOTNOTES:

[1] GIABA – “Mutual evaluation/Mutual evaluation of Nigeria” available at www.giaba.org

[2] Premium Times Nigeria “Why FATF Placed Nigeria on Grey List, How the Country Won Its Way Back” (25^th October 2025).

[3] Financial Action Task Force (FATF) – “Outcomes FATF Plenary, 22-24 October 2025” (FATF news/ press release) <https://www.fatf-gafi.org/en/publications/Fatfgeneral/outcomes-FATF-plenary-october-2025.html> accessed 30^th October, 2025.

[4] Businessday (Nigeria) “FATF delisting will boost investors’ confidence in Nigeria – SEC” (27^th October 2025).

[5] White & Case LLP. “The Economic impact of FATF Grey-Listing” (30^th October 2023).

[6] FATF Guidance “Guidance: Financial Inclusion, Anti-Money Laundering / Terrorist-Financing Measures” available at www.fatf-gafi.org

[7] Basel Institute on Governance “FATF grey list: truth and myths” (6^th February 2025) available at www.baselgovernance.org

[8] Transparency International /U4 Helpdesk “The Impact of grey listing by the Financial Action Task Force (FATF) – A regional focus on Sub-Saharan Africa” available at www.knowledgehub.transparency.org 

[9] Transparency International /U4 Helpdesk “The Impact of grey listing by the Financial Action Task Force (FATF) – A regional focus on Sub-Saharan Africa” available at www.knowledgehub.transparency.org

[10] Basel Institute on Governance “FATF grey list: truth and myths” (6^th February 2025) available at www.baselgovernance.org

[11] IMF Working Paper “Impact of grey-listing on capital flow” (26^th May 2021)

[12] FATF “Partnering in the fight against financial crime: Data protection, Technology and Private sector information sharing” (20^th July 2022)

[13] Transparency International /U4 Helpdesk “The Impact of grey listing by the Financial Action Task Force (FATF) – A regional focus on Sub-Saharan Africa” available at www.knowledgehub.transparency.org

[14] FATF Publications “Illicit Financial flows from Cyber-enabled fraud” (13^th March 2023).

[15] FATF Publications “Illicit Financial flows from Cyber-enabled fraud” (13^th March 2023).

[16] White & Case LLP. “The Economic impact of FATF Grey-Listing” (30^th October 2023).

[17] Basel Institute on Governance“FATF grey-listing in sub-saharan Africa” (1^st October 2025) available at www.baselgovernance.org