Contributor: Oby Umeh
Introduction
Nigeria’s recent removal from the Financial Action Task Force (FATF) Grey List marks a historic milestone for the nation’s financial governance and legal sector. This achievement signals a renewed vote of confidence in Nigeria’s commitment to strengthening its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) framework an effort that has spanned several years of reforms, inter-agency collaboration, and institutional resilience[1].
The Financial Action Task Force (FATF), an intergovernmental body established to promote global standards against money laundering, terrorist financing, and proliferation financing, places countries on its “grey list” when they are found to have strategic deficiencies in these areas. While grey listed countries are not subject to sanctions, they are placed under increased monitoring and required to work closely with the FATF to address identified shortcomings within a specific timeframe.
Being on the grey list has practical and far-reaching consequences. It often leads to reduced investor confidence, heightened scrutiny of financial transactions, and delays in international banking operations, as international institutions become cautious when dealing with entities from such jurisdictions. For developing economies like Nigeria, it can also affect foreign direct investment and limit access to international financial systems and investments.
Therefore, Nigeria’s delisting represents much more than a procedural update, it is a symbol of restored trust and improved global standing. It emphasizes the progress made by Nigeria’s financial and regulatory institutions, including the Economic and Financial Crimes Commission (EFCC), the Nigerian Financial Intelligence Unit (NFIU), and the Central Bank of Nigeria (CBN), as well as the significant contributions of the legal and banking sector in ensuring compliance with international standards.
Beyond the national celebration, this milestone carries far-reaching implications for the economy, governance, legal, and banking sectors. For professionals across these spaces, it highlights the growing importance of compliance, due diligence, and financial transparency as central pillars of sustainable development and modern practice.
UNDERSTANDING THE FATF GREY LIST
To appreciate the significance of Nigeria’s removal from the Financial Action Task Force (FATF) Grey List, it is essential to first understand what the FATF is and what being on this list entails.
The Financial Action Task Force (FATF) is an intergovernmental policy-making body established in 1989 to set international standards for combating money laundering, terrorist financing, and the financing of weapons of mass destruction. Its recommendations known globally as the FATF Standards serve as a benchmark for countries to ensure the integrity and transparency of their financial systems.
When a country is placed on the grey list, it means that FATF has identified strategic deficiencies in that country’s systems for preventing and combating money laundering and terrorist financing[2]. Such countries are not subject to direct sanctions, but they are subjected to increased monitoring and are required to implement a time-bound action plan to address the identified gaps.
Being on the grey list carries serious implications. Financial institutions and investors around the world tend to view grey-listed countries as high-risk jurisdictions, leading to:
- Increased scrutiny of financial transactions originating from those countries;
- Delays or restrictions in international banking operations;
- Reduced access to foreign investment and correspondent banking relationships; and
- A general decline in confidence in the country’s financial and regulatory systems.[3]
For Nigeria, being grey-listed in February 2023 meant that the FATF found weaknesses in areas such as the effectiveness of regulatory oversight, enforcement of AML/CFT policies, and coordination among key institutions. The country was therefore required to demonstrate significant progress in these areas before being removed from the list.
The process of delisting is rigorous and evidence-based. FATF assesses whether a country has implemented the required reforms, strengthened its institutional capacity, and demonstrated a sustained commitment to compliance. Nigeria’s eventual removal from the grey list on the 24th of October 2025 is, therefore, a testament to the collective effort of regulatory agencies, financial institutions, and the legal sector in addressing those gaps.[4]
Nigeria’s Journey to Delisting
Nigeria’s removal from the Financial Action Task Force (FATF) Grey List did not happen overnight. It was the result of a series of deliberate policy reforms, institutional collaboration, and strengthened enforcement mechanisms aimed at improving compliance with global Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) policies[5].
After being placed on the grey list in February 2023, the FATF identified several strategic deficiencies in Nigeria’s framework. These included gaps in regulatory polices, beneficial ownership transparency, risk-based supervision, and effectiveness in investigation and prosecution of financial crimes. Recognizing the implications of continued listing, the Nigerian government, through its financial, legal, enforcement institutions and the banking sector, took decisive steps to address these weaknesses.[6]
Under the coordination of the Nigerian Financial Intelligence Unit (NFIU), key agencies such as the Economic and Financial Crimes Commission (EFCC), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Department of State Services (DSS), Independent Corrupt Practices and Other Related Offences Commission (ICPC), National Insurance Commission (NAICOM), National Drug Law Enforcement Agency(NDLEA) and other government agencies worked collectively to implement FATF’s recommended action plan. These efforts included:
- Strengthening legal and institutional frameworks for AML/CFT compliance;
- Enhancing inter-agency cooperation and information sharing;
- Improving prosecution of money laundering and terrorism-financing offences;
- Ensuring greater transparency in the ownership of legal entities and corporate structures; and
- Conducting targeted training and awareness programs for financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs).[7]
The banking sector played a central and practical role in turning policy into action. Under the guidance of the CBN, Nigerian banks and other financial institutions enhanced their compliance controls by implementing robust Know-Your-Customer (KYC) procedures, improved transaction monitoring systems, and risk-based customer due diligence. Banks strengthened their compliance units, adopted improved beneficial ownership verification processes, and worked to preserve correspondent banking relationships by demonstrating adherence to international standards. The sector also participated in cross-sector training and intelligence sharing initiatives, which improved early detection and reporting of suspicious transactions[8].
The legal sector likewise provided vital support. Through initiatives like the Nigerian Bar Association Anti-Money Laundering Committee (NBAAMLC) has been actively involved in compliance awareness and the promotion of global best practices. Law firms across the country have also played a vital role in this process, supporting clients with compliance reviews, advisory services, and training on anti–money laundering and counter-terrorism financing policies. This renewed emphasis on compliance not only strengthens the integrity of legal practice in Nigeria but also positions law firms and practitioners as key partners in sustaining the country’s improved international standing.[9]
By October 2025, FATF acknowledged Nigeria’s significant progress in implementing its action plan and strengthening the effectiveness of its AML/CFT regime. The country’s removal from the grey list was therefore not only a mark of regulatory compliance but a recognition of the coordinated efforts of government agencies, the banking sector, enforcement bodies, and the legal profession to restore credibility, promote transparency, and reinforce the integrity of Nigeria’s financial system.
Impact on Nigeria’s Economy and Global Image
Nigeria’s removal from the FATF grey list marks a significant turning point for its economy and international reputation. During the period of greylisting, the country faced increased scrutiny from international financial institutions, investors, and global markets. This heightened monitoring created a perception of risk, which affected foreign direct investment inflows, slowed international trade transactions, and made international financing more cumbersome for both private and public entities.
With the recent delisting, that perception is set to change. The move restores confidence among international investors and development partners, signalling that Nigeria has strengthened its anti–money laundering and counter-terrorism financing (AML/CFT) systems and is committed to transparency and accountability[10]. This renewed confidence is likely to enhance foreign investment, boost capital inflows, and improve Nigeria’s creditworthiness in the global market.
For the banking and financial sector, the delisting provides a long-awaited relief from the operational and reputational challenges associated with increased global scrutiny. Nigerian banks can now engage in international transactions with greater ease, rebuild correspondent banking relationships, and attract new foreign partnerships[11]. This development is expected to boost liquidity, improve transaction efficiency, and promote investor confidence in the Nigerian financial system. However, with this renewed trust comes greater responsibility, banks must continue to strengthen compliance and risk management practices to sustain these gains.
For the legal sector, the milestone also signifies progress. The Nigerian Bar Association’s Anti-Money Laundering Committee (NBA-MLC) has been at the forefront of driving compliance awareness and global best practices within the legal profession. Law firms across the country have also played an instrumental role, supporting clients with compliance reviews, advisory services, and AML/CFT policy understanding. This growth emphasizes the compliance and professional responsibility enhances the integrity of Nigeria’s legal system and positions its practitioners as key stakeholders in sustaining the country’s improved international standing[12].
For Nigerian businesses generally, the delisting is expected to reduce transactional challenges and improve access to international markets. Small and medium-scale enterprises (SMEs), exporters, and corporations that depend on cross-border trade will benefit from lower compliance delays and improved confidence from foreign partners. The enhanced perception of Nigeria as a safer and more transparent business environment could also encourage greater foreign participation in local industries, partnerships, and joint ventures.[13]
Beyond the economic benefits, this milestone enhances Nigeria’s global image as a country taking concrete steps toward institutional reform and responsible financial governance. It positions Nigeria as a credible player in the international financial system and strengthens diplomatic and trade relations with other nations.[14]
Ultimately, this achievement is more than a regulatory milestone, it is a reflection of Nigeria’s resilience, policy commitment, and growing reputation as a country capable of aligning with global standards for financial integrity and accountability.
What Businesses and Professionals Need to Know
While Nigeria’s removal from the FATF grey list is a major achievement, it does not mean the country is free from scrutiny. Rather, it signifies that Nigeria has made sufficient progress in strengthening its anti–money laundering and counter-terrorism financing (AML/CFT) systems and must now sustain that momentum. For businesses and professionals, this moment calls for continued vigilance, compliance, and transparency.
For businesses, especially those involved in international trade, finance, and investments, adherence to compliance obligations remains crucial. Companies must ensure that their Know Your Customer (KYC) processes, record-keeping practices, and due diligence standards meet both national and international requirements. This is particularly important for sectors vulnerable to money laundering, such as real estate, legal services, financial technology, and import/export operations[15].
For professionals, including lawyers, accountants, and financial advisers, this milestone should serve as a reminder that ethical responsibility and compliance are now integral to business practice. The FATF’s ongoing monitoring framework means Nigeria will continue to be assessed for consistency and sustainability of reforms. As such, professionals must remain informed about evolving regulations, maintain up-to-date compliance programs, and provide sound advisory support to clients.[16]
Staying compliant is not just a legal obligation it is a competitive advantage. Businesses and professionals who integrate AML/CFT principles into their operations will not only avoid regulatory risks but also position themselves as credible and trustworthy partners in the global market.
Conclusion
Nigeria’s removal from the FATF grey list is a defining moment in the country’s journey toward financial integrity, institutional reform, and global credibility. It reflects the combined efforts of government agencies, financial regulators, the legal community, and private sector stakeholders who have worked tirelessly to strengthen the nation’s anti–money laundering and counter-terrorism financing frameworks.
However, delisting should not signal complacency. The real challenge lies in sustaining the reforms, strengthening oversight, and deepening the culture of compliance across all sectors. For businesses, financial institutions, and professionals, this achievement should inspire renewed commitment to transparency, accountability, and ethical conduct.
As Nigeria moves forward, this milestone presents an opportunity to build a more resilient economy one that inspires investor confidence, promotes good governance, and sets a new benchmark for financial and institutional excellence across Africa. The world is watching, and Nigeria has shown that with consistent effort and collaboration, meaningful reform is indeed possible.
Reference
- Al Jazeera and News Agencies, Four African countries taken off global money-laundering ‘grey list(October 2025) Available at https://www.aljazeera.com/news/2025/10/24/four-african-countries-taken-off-global-money-laundering-grey-list?utm Accessed 25th October 2025. ↑
- Financial Action Task Force (FATF), Black and grey lists Jurisdictions under Increased Monitoring (2024) Available at https://www.fatf-gafi.org/en/countries/black-and-grey-lists.html?utm Accessed 25th October 2025. ↑
- FATF, FATF changes its grey listing criteria to further focus on risk.(October 2024) Available at https://www.fatf-gafi.org/en/publications/Fatfgeneral/FATF-grey-listing-criteria.html?utm Accessed 25th October 2025. ↑
- FATF, What we do Identifying high-risk jurisdictions. (2024) Available https://www.fatf-gafi.org/en/the-fatf/what-we-do.html? Accessed 25th October 2025. ↑
- Financial Action Task Force (FATF), “Black and grey lists – Jurisdictions under Increased Monitoring Available at: https://www.fatf-gafi.org/en/countries/black-and-grey-lists. Accessed 25th October 2025. ↑
- FATF, “Nigeria’s progress in measures to combat money laundering and the financing of terrorism and proliferation Available https://www.fatf-gafi.org/en/publications/Mutualevaluations/Nigeria-FUR-2024.html Accessed 25th October 2025. ↑
- Nigeria’s exit from FATF grey list will increase investor confidence, says SEC”, The Guardian (Nigeria), 20 May 2025. Available at https://guardian.ng/business-services/nigerias-exit-from-fatf-grey-list-will-increase-investor-confidence-says-sec/ Accessed 25th October 2025. ↑
- Business Day, Onyinye Nwachukwu, Nigeria steps up reforms to exit FATF grey list by mid-2025 Available https://businessday.ng/news/article/nigeria-steps-up-reforms-to-exit-fatf-grey-list-by-mid-2025/ Accessed 25th October 2025. ↑
- TEMPLARS Law, Dayo Okusami, Dr. Jude Odinkonigbo, Lawal Kazeem, Elizabeth Toweh. The What and Why of Nigeria’s Grey Listing by the Financial Action Task Force and its Implications on Businesses Available Operating in Nigeria https://www.templars-law.com/app/uploads/2023/05/THE-WHAT-AND-WHY-OF-NIGERIAS-GREY-LISTING-2.pdf Accessed 25th October 2025. ↑
- Securities and Exchange Commission (Nigeria) (SEC). “Nigeria’s exit from FATF grey list will increase investor confidence, says SEC”. Available at: https://guardian.ng/business-services/nigerias-exit-from-fatf-grey-list-will-increase-investor-confidence-says-sec/ Accessed 25th October 2025 ↑
- Federal Ministry of Finance Nigeria Intensifies Efforts to Exist FATF Grey List Available at https://finance.gov.ng/nigeria-intensifies-efforts-to-exit-fatf-grey-list-by-q2-2025 Accessed 25th October 2025 ↑
- O. M. Atoyebi, SAN FCIArb.(U.K) Understanding Nigeria’s Grey Listing by the FATF: What It Means, Why It Happened, and What’s Next for Businesses. Available at https://omaplex.com.ng/understanding-nigerias-grey-listing-by-the-fatf-what-it-means-why-it-happened-and-whats-next-for-businesses/ Accessed 25th October 2025. ↑
- Bola Ahmed Tinubu, President of Nigeria. “President Tinubu welcomes the delisting of Nigeria from the FATF grey list, says Nigeria is committed to global financial transparency.” Available at https://statehouse.gov.ng/president-tinubu-welcomes-the-delisting-of-nigeria-from-the-fatf-grey-list-says-nigeria-is-committed-to-global-financial-transparency Accessed 25th October 2025 ↑
- Reuters. “South Africa, Nigeria exit global financial crime watch list”. Available at https://www.reuters.com/world/africa/south-africa-nigeria-among-african-countries-dropped-fatf-grey-list-2025-10-24/ Accessed 25th October 2025 ↑
- Busha co-founder, Nairametrics. (2025, September 3). “FATF grey list, a major stumbling block affecting Nigeria’s cross-border payment Available at https://nairametrics.com/2025/09/03/fatf-grey-list-a-major-stumbling-block-affecting-nigerias-cross-border-payment/ Accessed 25th October 2025 ↑
- Helen Oji. (2025, May 20). “Nigeria’s exit from FATF grey list will increase investor confidence, says SEC”. The Guardian. Available at https://guardian.ng/business-services/nigerias-exit-from-fatf-grey-list-will-increase-investor-confidence-says-sec Accessed 25th October 2025 ↑
