Introduction
On 24 October 2025, the Financial Action Task Force (FATF), announced that Nigeria had been removed from its grey list of jurisdictions under increased monitoring. This milestone follows two years of sustained reforms in Nigeria’s anti-money-laundering (AML), counter-financing of terrorism (CFT), and counter-proliferation financing (CPF) frameworks. According to the FATF, Nigeria had demonstrated ‘substantial progress in addressing strategic deficiencies identified in 2023.’ For legal and compliance professionals, this delisting represents not only a regulatory success but also a recalibration of Nigeria’s compliance obligations and opportunities for the future.
Background: Why Nigeria Was Grey-Listed
The Financial Action Task Force (FATF) is a global intergovernmental body established to set and enforce international standards for combating money laundering, terrorist financing, and proliferation financing. It monitors countries’ compliance with these standards and classifies them based on performance. The FAFT maintains two key lists (The Grey List and the Black List) of jurisdictions based on deficiencies in anti-money laundering (AML) and counter financing terrorism (CFT).The Grey List includes jurisdictions under increased monitoring that are actively working to address strategic deficiencies in their financial systems, while The Black List designates high-risk jurisdictions that have failed to make sufficient progress. Being listed can increase compliance scrutiny, raise the cost of international transactions, and deter foreign investment.
Nigeria was placed on the FATF grey list in February 2023, signalling global concern about vulnerabilities in its financial system and the need for tighter AML/CFT oversight. The delisting followed an evaluation report conducted by FAFT and the Inter-Governmental action Group Against Money Laundering in West Africa (GIABA) which highlighted Nigeria’s insufficient use of financial intelligence, weak risk-based supervision, deficiencies in beneficial ownership and non-compliance with targeted financial sanctions. The listing meant that transactions involving Nigerian institutions were subjected to enhanced due diligence by international counterparties, resulting in higher transaction costs, delayed processing, and reputational strain on local financial institutions.
In response, Nigeria embarked on an ambitious reform programme led by agencies including the Central Bank of Nigeria (CBN), Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC). These efforts included enactment and enforcement of the Money Laundering (Prevention and Prohibition) Act, implementation of beneficial-ownership transparency obligations for companies, broader supervision of Designated Non-Financial Businesses and Professions (DNFBPs), and strengthened inter-agency coordination between regulators and enforcement bodies.
Nigeria’s delisting
At the October 2025 FATF Plenary held in Paris, France. Nigeria, (along with South Africa, Mozambique, and Burkina Faso) was officially removed from the FATF grey list, having completed its action plan and demonstrated effective implementation of reforms. This outcome shows a vote of confidence in Nigeria’s financial governance and reinforces its commitment to global standards on financial integrity and transparency.
The Investment Risk Perspective
From a risk standpoint, Nigeria’s exit from the FATF grey list has four key implications:
- Reduced Reputational and Compliance Risk – International investors and banks face fewer restrictions in conducting transactions involving Nigerian entities.
- Enhanced Predictability – Regulatory enforcement is now more consistent, making due diligence processes clearer and more efficient.
- Access to Cheaper Capital – As Nigeria’s perceived compliance improves, borrowing costs and risk-adjusted capital requirements may decline.
- Alignment with ESG and Governance Standards – Investors with environmental, social, and governance (ESG) mandates can now engage more confidently in Nigerian opportunities without FATF-related compliance stigma.
Nonetheless, investors should maintain standard compliance programmes. FATF delisting reduces systemic risk but does not eliminate operational or political risks inherent in emerging markets.
Sectoral Opportunities for Investors
Certain sectors stand to gain more directly from Nigeria’s improved global compliance standing:
- Banking & Fintech – Strengthened AML/CFT systems create an enabling environment for cross-border payments, digital banking, and fintech expansion.
- Energy and Extractives – Reduced regulatory risk encourages renewed joint ventures and financing of energy infrastructure.
- Real Estate & Construction – Greater transparency in beneficial ownership and AML monitoring reduces illicit fund inflows, attracting institutional investors.
- Manufacturing & Trade – Improved access to global supply chain financing and trade credit facilities.
These dynamics collectively enhance Nigeria’s attractiveness as an investment destination and reinforce its position as a gateway to the West African market.
Implications for Legal and Compliance Practice
1. Rebuilding International Confidence
Nigeria’s removal from the grey list enhances its regulatory reputation and reduces perceived financial risk. For law firms, corporate firms, and compliance professionals, this change could mean fewer barriers to cross-border transactions, smoother correspondent banking relationships, and renewed investor interest.
2. Strengthened AML/CFT Compliance Expectations
Delisting does not signify regulatory relaxation, it heightens responsibility. Compliance teams must now operationalise reforms by conducting enhanced customer due diligence, updating internal AML/CFT manuals, and implementing risk-based supervision of high-value transactions and politically exposed persons (PEPs).
3. Intersection with Data Protection Obligations
Nigeria’s delisting coincides with the maturing of the Nigeria Data Protection Act (NDPA) 2023, which imposes strict obligations on lawful data processing. The convergence of AML/CFT and data protection means financial institutions and professional firms must ensure that KYC and due diligence processes comply with privacy standards.
4. Strengthened Credibility in Dispute Resolution
From a dispute resolution perspective, the FATF delisting enhances Nigeria’s standing as a credible jurisdiction for international arbitration and investment disputes. A stable, transparent financial environment improves investor confidence in Nigerian-seated arbitrations and supports enforceability of awards.
Corporate Governance and Continuing Obligations
For boards and compliance teams, the delisting underscores the need for continuous regulatory vigilance. Organisations should conduct annual AML/CFT and data-protection audits, maintain transparent reporting mechanisms, and establish cross-departmental coordination between compliance, legal, and risk functions.
Nigeria’s exit from the FATF grey list is both a commendation and a challenge. The commendation lies in recognition of progress; the challenge lies in sustaining momentum and ensuring reforms yield lasting institutional impact. The delisting provides an opportunity for Nigeria to attract greater foreign investment, strengthen financial governance, and solidify its role as a regional leader in compliance reform.
Conclusion
Nigeria’s removal from the FATF grey list is a landmark achievement in the nation’s pursuit of financial transparency and regulatory reform. The delisting demonstrates a renewed commitment to financial transparency, regulatory accountability, and institutional reform—factors critical to sustainable investment confidence. For investors and risk professionals, this milestone represents a new era of accountability—one that demands sustained commitment to governance, risk management, and ethical business conduct.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. Readers should not rely on the content as a substitute for professional consultation. The implications of Nigeria’s removal from the FATF grey list may vary depending on individual circumstances and regulatory developments. We strongly recommend seeking guidance from qualified legal or financial professionals before making decisions based on this information.
For further assistance with compliance, governance, or advisory services, please contact the Lex Luminar team at support@lexluminar.com.
References
- FATF (2025) ‘Public Statement on Jurisdictions under Increased Monitoring’. [https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions](https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions)
- FATF (2023) ‘Jurisdictions Under Increased Monitoring — February 2023 Update’. [https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions.html](https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions.html)
- Central Bank of Nigeria (2024) ‘Circular on AML/CFT Supervisory Frameworks’. [https://www.cbn.gov.ng](https://www.cbn.gov.ng)
- Reuters (2025) ‘South Africa, Nigeria Exit Global Financial Crime Watch List’, 24 October. [https://www.reuters.com/world/africa/south-africa-nigeria-exit-global-financial-crime-watch-list-2025-10-24](https://www.reuters.com/world/africa/south-africa-nigeria-exit-global-financial-crime-watch-list-2025-10-24)
- FATF (2025) Outcomes of the October 2025 Plenary Meeting, Paris. [https://www.fatf-gafi.org/en/publications/fatf-plenary-outcomes.html](https://www.fatf-gafi.org/en/publications/fatf-plenary-outcomes.html)
- GIABA (2025) ‘Follow-Up Evaluation Report on Nigeria’[https://www.giaba.org](https://www.giaba.org)
- GCI-CCM (2025) ‘Nigeria’s Path to FATF Compliance: Overcoming Grey-List Challenges’ [https://www.gci-ccm.org/insight/2025/04/nigerias-path-fatf-compliance-overcoming-grey-list-challenges-2025-webinar](https://www.gci-ccm.org/insight/2025/04/nigerias-path-fatf-compliance-overcoming-grey-list-challenges-2025-webinar)