FATF Removes Nigeria From Global Financial Crimes Watchlist After Two Years of Monitoring

Nigeria was originally added to the list in February 2023 after FATF identified weaknesses in its system for combating money laundering, terrorism financing, and illicit financial flows.

Officials said the removal follows full implementation of a 19-point Action Plan agreed with FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), encompassing new laws, improved oversight, and better inter-agency coordination.

Nigeria’s Financial Integrity Milestone

Finance Minister Wale Edun said Nigeria’s focus extended beyond simply exiting the grey list.

“Nigeria’s ambition was never limited to completing the Action Plan and leaving the grey list,” Edun stated. “Our mission was to overhaul the system, enact legislative reforms, and reinforce institutions that safeguard financial integrity.”

He said the reforms align with President Bola Tinubu’s economic agenda aimed at restoring investor confidence, strengthening transparency, and eliminating loopholes that allow illicit capital to circulate through Nigeria’s financial channels.

The FATF said the decision followed an on-site assessment that verified Nigeria had addressed technical and operational deficiencies and ensured the sustainability of reforms.

FATF Confirmation and Paris Plenary Outcome

The FATF’s Paris session featured representatives from more than 200 jurisdictions, including major international organisations such as the IMF, World Bank, and United Nations. The watchdog praised Nigeria’s “substantial progress” in addressing its deficiencies within the agreed timeframe.

In its official report, the task force noted that Nigeria had demonstrated “effective enforcement and improved coordination among competent authorities,” signalling maturity in its AML/CFT regime.

During the same plenary, FATF also removed Burkina Faso, Mozambique, and South Africa from the grey list, marking a wider improvement in Africa’s financial governance landscape.

Legislative and Institutional Overhauls

Attorney-General Lateef Fagbemi described the delisting as a “landmark victory for Nigeria’s rule of law.”

He said the reforms included amendments to key statutes such as the Money Laundering (Prevention and Prohibition) Act, the Terrorism (Prevention and Prohibition) Act, and the establishment of specialized courts to handle financial crime cases.

Fagbemi confirmed that Nigeria has also been accepted into the FATF Guest Jurisdictions Initiative, allowing it to participate in future FATF meetings under its own flag for one year.

He said the inclusion “is a vote of confidence in Nigeria’s transparency architecture and a recognition of the nation’s efforts to align with global financial standards.”

The development, observers said, positions Nigeria to play a more active role in shaping regional policies on illicit finance and terrorism funding.

Coordinated National Response

Hafsat Abubakar Bakari, Director and Chief Executive Officer of the Nigerian Financial Intelligence Unit (NFIU), said the delisting reflected a “coordinated national effort.”

“Nigeria’s removal from the FATF grey list is a true test of resilience and collaboration,” she said. “It proves that Nigeria can meet and exceed international standards on financial integrity.”

Bakari said the achievement was possible due to close coordination between law-enforcement agencies, the Central Bank of Nigeria, and financial institutions that have enhanced monitoring systems and reporting mechanisms.

She emphasized that sustaining the gains will require constant vigilance, data-driven intelligence sharing, and periodic system reviews.

“This is not the end of our journey,” she said. “It is the beginning of a stronger, more transparent financial ecosystem.”

Wider Economic and Diplomatic Implications

Analysts said the delisting could strengthen Nigeria’s investment appeal and credit ratings while improving its reputation among international partners.

The decision is expected to ease cross-border transactions and restore correspondent banking relationships strained during the period of FATF monitoring.

A BBC report noted that investors often interpret FATF’s monitoring status as a risk indicator that influences capital inflows and trade negotiations.

Officials said the outcome reflects Nigeria’s broader commitment to fiscal discipline, governance reforms, and technology-driven compliance in both public and private sectors.

International Endorsement

Development partners, including the World Bank and the African Development Bank, welcomed the FATF’s decision, describing it as a validation of Nigeria’s anti-corruption drive.

The Central Bank said financial institutions must continue adopting risk-based compliance frameworks and promptly report suspicious transactions to maintain credibility.

Observers noted that while delisting marks progress, it does not imply the absence of financial crime but rather indicates that the country now has adequate safeguards and institutional capacity to address risks.

Nigeria’s inclusion in FATF’s Guest Jurisdictions Initiative enables the country to contribute to global policy debates on digital currencies, beneficial ownership transparency, and terrorist financing countermeasures.

Regional Progress in Africa

FATF’s decision to delist four African countries underscores regional progress in AML/CFT compliance. West African institutions under GIABA have been credited for strengthening peer-review mechanisms and promoting uniform reporting standards across the sub-region.

Experts said Nigeria’s progress could serve as a model for neighboring states still under enhanced monitoring, highlighting the benefits of strong domestic coordination and international engagement.

They added that sustained implementation of reforms would determine whether Nigeria maintains long-term compliance and credibility within the global financial system.

Looking Ahead

Authorities said Nigeria will continue upgrading financial intelligence frameworks, deepening international cooperation, and investing in technology to combat emerging threats like crypto-related laundering and cyber-enabled terrorist financing.

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Minister Edun reaffirmed that transparency remains central to Nigeria’s governance model. “Our objective is to institutionalize accountability as part of our economic fabric,” he said. “Financial integrity is not an event but a sustained process.”

He urged stakeholders to remain committed to reform, saying that strong institutions remain the bedrock of sustainable economic growth.