When the Financial Action Task Force (FATF) announced on Friday that Nigeria had been removed from its “grey list” of countries under increased monitoring, it marked the end of over two-year journey of intense financial reforms, coordinated inter-agency action, and a resolute campaign led by the Central Bank of Nigeria (CBN) to restore international confidence in Nigeria’s financial system.
For a country once perceived as high-risk for money laundering and terrorism financing, the decision represents a major reputational turnaround. It not only validates Nigeria’s renewed commitment to transparency and global best practices, but also unlocks new opportunities for trade, investment, and economic growth.
Nigeria was placed on the FATF grey list in 2023 following an assessment that identified “strategic deficiencies” in the country’s anti-money laundering and counter-terrorism financing (AML/CFT) frameworks. The FATF, a global inter-governmental body that sets standards for combating financial crimes, found weaknesses in supervision, enforcement, beneficial ownership transparency, and coordination among relevant agencies.
Being on the grey list had significant implications. It subjected Nigeria to enhanced due diligence from international financial institutions, increased transaction scrutiny, and higher compliance costs for Nigerian banks and businesses engaging in cross-border transactions. In practical terms, it raised barriers for Nigerian corporates seeking international partnerships, loans, and correspondent banking relationships.
Recognising these consequences, the Nigerian authorities swiftly initiated a comprehensive national strategy to exit the list. The programme, coordinated through the Inter-Ministerial Committee on AML/CFT chaired by the Federal Ministry of Justice, involved key agencies including the CBN, the Nigerian Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), and the Securities and Exchange Commission (SEC).
CBN’s Central Role in the Reform Drive
At the heart of Nigeria’s reform success was the Central Bank of Nigeria. Under the leadership of Governor Olayemi Cardoso, the apex bank anchored the most critical components of FATF’s required action plan—supervision, governance, transparency, and compliance.
The Central Bank undertook a broad revamp of its regulatory and supervisory frameworks. This included updating the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations for banks and other financial institutions, aligning them with FATF’s 40 Recommendations and risk-based approaches.
A major step forward was the introduction of enhanced risk-based supervision, where banks are now evaluated not only on compliance box-ticking but on the robustness of their internal systems to detect and report suspicious transactions.
The CBN also deepened oversight of non-bank financial institutions—particularly bureaux de change, remittance companies, and fintech platforms—by expanding compliance reporting and monitoring mechanisms. The goal was to close loopholes previously exploited for untraceable cross-border flows and informal foreign exchange dealings.
In addition, the apex bank implemented governance innovations such as the Foreign Exchange Code (FX Code) and the Electronic Foreign Exchange Matching System (EFEMS), which collectively improved transparency and traceability of FX transactions, a key FATF concern.
Beyond its direct supervisory work, the CBN enhanced collaboration with other key agencies. It established stronger data-sharing arrangements with the NFIU, EFCC, and law enforcement bodies, ensuring timely information exchange on suspicious financial activities.
The coordinated approach allowed the CBN and its partners to close systemic gaps in beneficial ownership identification, suspicious transaction reporting, and asset recovery—areas where FATF previously rated Nigeria as non-compliant.
Governor Cardoso’s leadership proved pivotal in aligning institutional mandates with FATF’s action plan. Speaking on the development, he 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.”
The FATF’s decision followed a rigorous two-year evaluation and on-site verification mission, jointly conducted with its regional partner, the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA).
During this period, Nigeria was required to demonstrate measurable and sustainable progress on 15 recommended actions, including improvements in: Risk-based supervision of financial and designated non-financial businesses and professions (DNFBPs); beneficial ownership transparency to identify the real owners behind complex corporate structures; international cooperation and cross-border information exchange; prosecution and conviction of money laundering and terrorist financing offences; and recovery and management of criminal proceeds.
By early 2025, Nigeria had completed nearly all required benchmarks, paving the way for FATF’s on-site evaluation. The assessment team confirmed significant progress in regulatory enforcement, inter-agency coordination, and the integrity of financial transactions.
Reaping the Rewards of Reform
Nigeria’s removal from the grey list carries substantial economic dividends. According to the CBN, one immediate benefit is the reduction of compliance and due diligence costs for Nigerian financial institutions and corporations dealing with international partners.
For instance, Nigerian banks had previously faced extensive scrutiny and delays in correspondent banking arrangements. With the grey-list tag lifted, foreign banks are expected to re-engage more confidently, facilitating faster cross-border payments and settlements.
The CBN’s Director of Corporate Communications, Hakama Sidi, explained that the decision would “yield tangible benefits for businesses and households alike, including lower compliance costs, improved access to international finance, and faster, more affordable cross-border transactions.”
These benefits extend beyond the banking sector. Nigerian exporters and importers stand to enjoy smoother trade settlements, while remittance recipients could see quicker inflows at lower charges.
Moreover, the FATF decision bolsters the credibility of Nigeria’s financial system at a time when the country is seeking to attract foreign investment to stimulate economic growth. Investors often use FATF’s assessment as a benchmark for assessing financial risks. Nigeria’s exit signals an improved risk profile, potentially enhancing the country’s credit ratings and lowering borrowing costs.
Indeed, global rating agencies have already begun to take note. Moody’s and Fitch recently upgraded Nigeria’s outlook, citing improved policy coherence, stronger external balances, and renewed monetary discipline under the current CBN leadership. Similarly, the International Monetary Fund’s 2025 Article IV Consultation Report highlighted Nigeria’s “greater transparency, improved reserve adequacy, and a reform agenda increasingly aligned with global standards.”
From a macroeconomic standpoint, the development reinforces the CBN’s broader reform strategy aimed at stabilising the naira, restoring investor confidence, and promoting inclusive growth.
A transparent, compliant financial system reduces illicit capital flight, supports the integrity of foreign exchange operations, and helps attract stable foreign direct investments. It also ensures that monetary policy transmission is less distorted by unrecorded or illegal flows.
For Nigerian fintechs and digital banks, the new global recognition could open doors for cross-border partnerships and funding. Many international investors had previously hesitated to engage with Nigerian fintech firms due to compliance risks linked to the grey-list status. With those concerns now lifted, the sector could witness renewed capital inflows and expansion.
Equally, the removal strengthens Nigeria’s participation in regional financial initiatives within ECOWAS and the African Continental Free Trade Area (AfCFTA). A sound AML/CFT framework enhances Nigeria’s credibility as a financial hub in West Africa, positioning it as a model for peer economies.
Consolidating the Gains
While celebrating the milestone, the CBN and other stakeholders acknowledge that sustaining compliance is an ongoing responsibility. FATF’s removal does not mean the end of scrutiny; rather, it places Nigeria under the normal follow-up process to ensure continuous adherence to international standards.
Governor Cardoso has therefore emphasized the importance of institutionalizing 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.”
The CBN plans to deepen regulatory oversight using advanced data analytics and digital monitoring tools to detect suspicious activities in real time. Additionally, it is working to promote a culture of compliance within financial institutions through enhanced capacity-building and accountability mechanisms.
Nigeria’s removal from the grey list is more than a technical compliance victory—it is a symbol of the country’s re-emergence as a responsible player in the global financial community. It signals to the world that Nigeria is serious about reform, transparency, and governance.
It also reflects the success of the coordinated policy approach championed by President Bola Ahmed Tinubu’s administration, under which key institutions such as the CBN, EFCC, NFIU, and the Ministry of Justice aligned their efforts to meet stringent international standards.
By joining South Africa, Mozambique, and Burkina Faso as the latest African countries to achieve this milestone, Nigeria has demonstrated that sustained commitment and inter-agency collaboration can yield transformative outcomes.
Nigeria’s exit from the FATF grey list is a defining moment in its financial reform story—a testament to the CBN’s leadership, the government’s coordination, and the resilience of the country’s institutions.
It affirms that transparency and compliance are not merely bureaucratic requirements but foundational pillars for economic recovery and sustainable development.
As the CBN consolidates its reforms and the financial system reaps the benefits of renewed confidence, Nigeria now stands better positioned to attract investment, grow trade, and build a more inclusive and credible economy.
The message from Abuja to the global financial community is now clear: Nigeria is back on the path of integrity, transparency, and trust.
