Nigeria’s Exit from the FATF Grey List: A New Chapter for Financial Integrity

BY REV DAVID UGOLOR

Nigeria’s removal from the Financial Action Task Force (FATF) grey list in October 2025 is more than a symbolic gesture of approval from the international community; it is a turning point for financial credibility, economic stability, and institutional reform. After years of scrutiny, the country has demonstrated that political will, coordination among regulatory institutions, and consistent transparency reforms can indeed rebuild global confidence in its financial system.

From Grey to Green: The Journey So Far

The FATF grey list identifies countries with deficiencies in their systems for combating money laundering, terrorist financing, and related financial crimes. Nigeria’s journey with the FATF has been a long one. The country was first listed in 2001 due to weak anti–money laundering controls, later delisted in 2006 after introducing new measures, and returned in 2023 when international assessors identified shortcomings in enforcement, supervision, and coordination among institutions.

The return to the list brought significant consequences. International banks became more cautious, global investors grew hesitant, and Nigeria’s reputation in financial governance suffered. The new administration under President Bola Ahmed Tinubu, aware of the risks of remaining grey-listed, made the issue a national priority. Through the National AML/CFT Coordination Committee, chaired by the Minister of Finance, the government developed a clear strategy to meet FATF’s twelve-point action plan.

Reforms That Made the Difference

Between 2023 and 2025, Nigeria implemented sweeping legal, institutional, and operational reforms that strengthened the integrity of its financial system. The Money Laundering (Prevention and Prohibition) Act 2022 and the Terrorism (Prevention and Prohibition) Act 2022 were both updated to align fully with FATF standards. The reforms improved transparency around beneficial ownership of companies, allowing regulators to trace the real individuals behind financial transactions — a long-standing FATF requirement.

Institutionally, the Nigerian Financial Intelligence Unit (NFIU) gained operational independence and improved its analytical capacity, while key enforcement agencies such as the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission (ICPC), and Central Bank of Nigeria (CBN) enhanced coordination. These agencies began to exchange data and intelligence more effectively, closing loopholes in oversight and enforcement.

Importantly, regulatory supervision was expanded to include non-financial sectors such as real estate, accounting, and legal services, all of which had historically been weak spots in the fight against illicit financial flows. On the international front, Nigeria deepened cooperation with the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), Interpol, and several international partners, including the United Kingdom, United States, and the European Union, to improve cross-border intelligence and asset recovery.

The results of these coordinated efforts became evident at the FATF Plenary in Paris in October 2025, when the organization commended Nigeria’s “significant progress in strengthening its AML/CFT regime” and confirmed that all strategic deficiencies had been addressed. Nigeria’s name was officially removed from the grey list, restoring the country’s credibility within the global financial community.

The Role of Civil Society in the Reform Process

While government institutions and regulators played a crucial role in implementing these reforms, civil society organizations were equally instrumental in promoting awareness, accountability, and sector-specific compliance. The Africa Network for Environment and Economic Justice (ANEEJ) and the African Center for Governance, Asset Recovery and Sustainable Development (African Center), with funding from the Foreign, Commonwealth and Development Office (FCDO) of the United Kingdom, were at the forefront of civil society’s contribution.

Through their collaborative projects, these organizations supported national efforts to strengthen Nigeria’s AML/CFT framework by fostering dialogue between regulators, professional associations, and the public. Their work within the legal and judicial sectors helped to highlight vulnerabilities in the system and propose practical solutions. ANEEJ and the African Center partnered with the Nigerian Bar Association (NBA) and the National Judicial Institute (NJI) to facilitate legal sector risk assessments and training workshops for judges, lawyers, and compliance officers.

These interventions improved professional understanding of the obligations and risks associated with money laundering and terrorism financing. The Legal Sector Risk Assessment Report, produced through this collaboration, was later presented at the FATF International Cooperation Review Group (ICRG) meeting in Namibia, where it was warmly received as evidence of progress. The NFIU’s Director/CEO, Hafsat Abubakar Bakari, acknowledged that the report played a significant role in shaping the FATF’s positive evaluation of Nigeria’s performance.

This collaboration between government, civil society, and international partners demonstrated that reform sustainability thrives when accountability is shared and when advocacy complements policy implementation.

Economic and Reputational Impact

Nigeria’s removal from the FATF Grey List has already begun to yield positive economic and reputational outcomes. The delisting has restored investor confidence, reducing the compliance risk that had deterred international financial institutions. Nigerian banks now operate with fewer restrictions on correspondent banking relationships, improving trade, remittance flows, and access to credit. The country’s global standing within FATF and GIABA has also been reinstated, reaffirming its leadership role in promoting financial integrity across West Africa.

However, delisting does not signal the end of the journey. FATF’s decision is a recognition of progress, but continued compliance will depend on sustained vigilance. The next mutual evaluation—expected in 2026 or 2027—will assess not just reforms on paper but tangible results such as successful prosecutions, asset recoveries, and institutional resilience.

Sustaining the Gains

To maintain these gains, Nigeria must embed FATF standards into its long-term governance strategy, institutionalize routine compliance audits, and invest in digital tools that enhance data sharing between the NFIU, CBN, EFCC, and Customs Service. Building the professional capacity of financial and non-financial actors remains essential; compliance should not be seen as a bureaucratic obligation but as part of national culture. Transparency must be deepened through public access to the beneficial ownership register, while the independence of key institutions like the NFIU and EFCC must be safeguarded to prevent political interference.

Conclusion

Nigeria’s exit from the FATF Grey List is a shared victory — a product of government commitment, institutional reform, and the persistent advocacy of civil society organizations. It demonstrates what can be achieved when purpose aligns with partnership.

As President Bola Ahmed Tinubu aptly stated, this success is “not just a victory for government — it is a vote of confidence in Nigeria’s institutions and their ability to uphold global standards.” For ANEEJ, the African Center, and their partners, this milestone reinforces the importance of sustained engagement and public accountability in financial governance.

The delisting marks the beginning of a new chapter. The challenge ahead is to consolidate the reforms, prevent regression, and ensure that transparency and integrity become permanent features of Nigeria’s financial architecture.

Rev David Ugolor is the Executive Director of Africa Network for Environment and Economic Justice (ANEEJ).