13 Nov 2025
Implications of Nigeria’s Removal from the FATF Grey List
By: Khadijat Akewushola & Osowo-Okime Obia
Background
The Financial Action Task Force (FATF) has officially removed Nigeria from its “grey list” after acknowledging the country’s significant progress in strengthening its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. This marks a significant milestone since February 2023, when the Paris-based global watchdog placed Nigeria under special scrutiny due to deficiencies in the country’s financial monitoring systems.
What is FATF
FATF is the leading global organisation tasked with tackling money laundering, as well as terrorist and proliferation financing. They research how money is laundered, how terrorism is funded, and then promote global standards to mitigate these risks, assessing whether countries are taking effective action. The FATF holds countries that do not comply with the FATF Standards accountable.
What does the Grey List mean?
Countries on the FATF grey list are identified as having weaknesses in their measures to combat money laundering and terrorist financing. When a country repeatedly fails to meet FATF Standards, it is placed under strict monitoring and often referred to as either “the grey list or the black list”. However, grey-listed countries are recognised for showing commitment to addressing these issues under FATF supervision, but investors still apply stricter due diligence rules to companies within such countries.
How did Nigeria get on the list?
In February 2023, the FATF announced in its plenary the inclusion of Nigeria on the grey list due to deficiencies in Nigeria’s anti-money laundering, counter-terrorist financing, and counter-proliferation financing strategies (AML/CFT). They expressed concerns about the country’s ability to implement effective measures fully. As such, Nigeria was required to demonstrate stronger reforms and transparency to regain international confidence.
How did we get out of it?
To be removed from the grey list, a country must state and adhere to the components of its action plan. After the FATF has determined that a country meets the requirements, it organises an on-site visit to confirm that the necessary legal, regulatory, and operational reforms are underway and there is political commitment and institutional capacity to sustain implementation.
Following its inclusion on the grey list announced in February 2023, Nigeria implemented a range of reforms to strengthen its regulatory framework, increase coordination among relevant agencies, and enhance oversight of financial institutions. These actions demonstrated the country’s commitment to aligning with global standards and establishing a more transparent and secure financial system. So, following an on-site visit in August 2025, the FATF expressed satisfaction with Nigeria’s compliance and institutional reforms. This led to the official announcement of Nigeria’s delisting at the October 2025 plenary session.
What legal and regulatory reforms contributed to the removal?
After being listed, the FATF issued a 19-point action plan that Nigeria was required to implement to avoid being blacklisted. Nigeria adhered to the plan, updated and implemented reforms on already existing legislations, including:
- The Money Laundering (Prevention and Prohibition) Act, 2022
- The Terrorism (Prevention and Prohibition) Act, 2022
There was enhanced enforcement of these laws, along with improved coordination and intelligence sharing among key finance-related agencies. The government heightened supervision of Designated Non-Financial Businesses and Professions (DNFBPs), which include entities such as lawyers, accountants, and real estate agents. A public beneficial ownership register was also established to increase transparency in corporate ownership structures. Between 2023 and 2025, Nigeria submitted six progress reports to the FATF, demonstrating steady improvement.
What does Removal mean for the Business Environment?
The FATF’s decision is positive news for Nigeria’s economy and the business environment. The delisting is expected to boost investor confidence, enhance the nation’s reputation in international markets, and attract foreign investment. It also signals that Nigeria is taking meaningful steps toward creating a more stable and trustworthy financial system.
For businesses, this means easier access to foreign capital, smoother international transactions, and better opportunities to secure partnerships and lenders who previously viewed the country as high-risk.
What does this mean for Nigeria and Africa at large?
President Bola Ahmed Tinubu described the delisting as “a major milestone in Nigeria’s journey towards economic reform, institutional integrity, and global credibility.” He commended the ministries, government agencies, private sector representatives, and international partners who worked collectively to achieve this progress.
This development also represents a broader win for Africa, as three other African countries, including South Africa, Burkina Faso and Mozambique, were removed from the list alongside Nigeria. The FATF President described the delisting as “a positive story for the continent,” reflecting collective progress in financial governance across Africa.
How can we avoid getting back on the list?
After removal from the grey list, a country continues to work within the FATF-Style Regional Body (FSRB) through its normal follow-up process to improve and strengthen its AML/CFT regime.
While the achievement is commendable, experts have emphasised that Nigeria must sustain and deepen the reforms that led to this success. This also highlights the need for a robust legal and regulatory reform framework. Continuous vigilance, strict enforcement, and transparent governance will be key to preventing a relapse into the grey list and ensuring lasting confidence in Nigeria’s financial and economic systems.
Khadijat is the team lead, State Business Environment Roundtable (SABER) at the ESC
Osowo-Okime is an intern at the ESC.