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Who makes the rules?
The Financial Action Task Force ("FATF") is an inter-governmental organisation established with the objectives of setting the standards, and promoting the implementation of legal, operational and regulatory measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
On 24 February 2023, it placed Nigeria on its "Grey List".
What is the FATF Grey List?
The FATF Grey List is a term used to describe countries under increased monitoring by FATF. Greylisting, in financial terms, is when the FATF puts a country under stricter economic monitoring and regulation. It signifies the country does not completely meet the FATF's standards for combating money laundering and terrorist financing (Anti-Money Laundering ("AML") Counter-Terrorism Financing ("CTF") frameworks) and but is earnestly trying to.
Financial & Economic Impact of the Grey List:
Because the country is seen as higher risk, there are economic repercussions such as:
- Higher borrowing costs for both the government and private sector,
- Access to international finance may become more difficult or expensive.
- The country may face slower trade and cross-border transactions, because partner banks might impose extra checks, delays, or even refuse certain transactions.
- Financial institutions may apply enhanced due-diligence (EDD) when dealing with entities from the grey-listed country.
- Some banks/investors may choose to de-risk (i.e., reduce or exit exposure) rather than take on added compliance burdens.
- This drop in confidence can reduce inward foreign direct investment (FDI), portfolio flows, or access to global banking services.
- This will in turn impact the reputation of Nigeria and also reduce investor confidence
Aid, Development Funding & Social Implications:
International aid agencies or multilateral lenders may become more cautious or attach additional conditions when dealing with a grey-listed country. This will in turn impact the society due toconstrained finance, leading to slower infrastructural development, underdeveloped healthcare facilities, lack of investment in education; reduced financial inclusion if banks are more cautious; possibly increased poverty or inequality, etc.
How did Nigeria get off the Grey List:
Nigeria's removal from the Grey List was the result of deliberate coordination and strong commitment to financial integrity. The FATF in its October 2025 Plenary commended the significant improvements undertaken by the country in strengthening its AML/CFT framework
Some Key Measures Undertaken include:
- Enactment of the Anti-Money Laundering (Prevention and Prohibition) Act, 2022 and the Terrorism (Prevention and Prohibition) Act, 2022 to modernize and strengthen the legal framework.
- Enhanced inter-agency coordination among the NFIU, CBN, EFCC, and law enforcement agencies for better intelligence sharing and enforcement.
- Strengthened risk-based supervision and compliance monitoring for financial and non-financial institutions.
- Establishment of a public register of beneficial ownership under the Companies and Allied Matters Act (CAMA) to improve corporate transparency.
- Improved asset-recovery mechanisms and tracking of illicit financial flows.
- Capacity building and modernization of financial intelligence operations led by the NFIU and supported by the Federal Ministries of Justice, Finance, and Interior.
- Sustained implementation of the FATF Action Plan, with measurable progress recognized at the FATF October 2025 Plenary.
How does this relate to the average Nigerian in Nigeria and in the diaspora (students, workers, parents)?
What will this mean for business in Nigeria and the roles they can now play abroad?
What will this mean for foreign investors in Nigeria?
What will this mean for banks? Scrutiny?
What will this mean as regards the diplomatic ties?
What will this mean about aid
Nigerians need to be confident in the government that they have the know how to exploit each advantage this removal brings to Nigeria
What will this mean for corruption?
Implications in terms for law firms? Multi border legal and financial exchange. As business start to expand into Nigeria, the need for correspondence with their home city will be crucial. And this will be done by lawyers. Fostering better legal understanding of other jurisdictions. And improving trade and investment?
How will this affect the DOLLAR?
How this will affect education?
How will it affect the health sector?
Did the removal of Nigeria from the grey list cause more scrutiny into our country? Trump? Christian killings? Is it a response to this? Conspiracy? Or the refinery (Chinese and Indian equipment and technology)? Will Nigeria overcome?
Implications of Nigeria's removal Strengthened international reputation and credibility
- Reduced scrutiny and delays for cross-border financial transactions
- Easier access to global finance and correspondent banking
- Improved investor confidence and potential increase in foreign investment
- Lower compliance costs for Nigerian businesses
- Better positioning in dealings with international lenders and partners
- Overall boost in confidence in Nigeria's financial system
Conclusion:
Nigeria has a fresh chance to show it is a reliable and secure place to do business. Staying off the grey list means keeping reforms alive, investing in stronger financial oversight, backing technology that improves transparency, and supporting banks and companies as they adjust to higher standards. If Nigeria keeps momentum, communicates these improvements clearly to investors, and protects the integrity of its financial system, the benefits of this upgrade will continue to grow.
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