Nigeria’s removal from the Financial Action Task Force (FATF) grey list in October 2025 marks a watershed in the country’s financial history.
It represents not only a victory for regulators in Abuja but also a major relief for banks, fintechs, and other businesses that have endured the reputational and operational penalties of grey-listing.
For nearly three years, Nigeria’s financial system carried the tag of a “jurisdiction under increased monitoring,” a designation that added friction to international transactions, raised the cost of capital, and chilled investor confidence.
The decision by the FATF to delist Nigeria restores a measure of trust that is critical to cross-border trade, investment, and digital finance.
Yet it also presents a challenge: to consolidate these gains and avoid a relapse into the conditions that triggered the listing in the first place.
How Nigeria Landed on the Grey List
Nigeria was placed on the FATF grey list on February 24, 2023, after the global watchdog identified “strategic deficiencies” in its anti-money-laundering and counter-terrorist-financing (AML/CFT) systems.
The concerns ranged from weak enforcement outcomes and limited access to beneficial ownership information to coordination gaps among supervisory bodies.
The listing carried real economic costs. Correspondent banks demanded heightened due diligence, cross-border payments slowed, and international lenders attached higher risk premiums to Nigerian transactions.
Analysts and multilateral institutions, including the IMF, warned at the time that grey-listing could raise Nigeria’s cost of capital and complicate foreign exchange inflows.
The Road to Redemption
Nigeria’s delisting was not accidental. It was the outcome of a sustained, multi-agency effort spanning nearly three years.
The government implemented a comprehensive action plan to address FATF’s recommendations, strengthened its legal and institutional frameworks, improved access to beneficial ownership data, and enhanced cooperation among regulatory agencies.
The Nigerian Financial Intelligence Unit (NFIU), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), and other key institutions worked in concert to show measurable improvements in supervision and enforcement. FATF’s October 2025 plenary, which confirmed Nigeria’s removal from the list, cited these outcomes, particularly improved oversight and inter-agency coordination, as decisive factors.
The Benefits: Credibility Restored
Delisting brings tangible economic and reputational benefits. The immediate impact is the reduction of the so-called “grey list premium”, the higher transaction and compliance costs imposed by foreign partners. Nigerian banks and fintechs can now expect smoother correspondent relationships and less cumbersome international payment processing.
Investor confidence, long dampened by concerns over regulatory reliability, is also expected to rebound. Easier access to capital and renewed interest from institutional investors could accelerate deal-making in Nigeria’s fast-growing fintech and digital sectors.
Moreover, macroeconomic stability stands to gain as lower risk premiums ease fiscal pressure and improve Nigeria’s borrowing profile.
The country’s financial ecosystem, spanning traditional banks to emerging digital platforms, now enjoys an opportunity to rebuild global confidence and expand its participation in international finance.
What Businesses Must Do Next
However, delisting is not a guarantee of permanence. It should be viewed as a platform for competitiveness rather than a signal for complacency. Firms must take proactive steps to deepen compliance and strengthen internal governance.
Investments in RegTech, artificial intelligence-driven transaction monitoring, and automated beneficial ownership screening can help financial institutions enhance transparency and efficiency. Updating investor communications and client onboarding narratives to reflect Nigeria’s improved global standing can also rebuild trust.
Furthermore, fintechs and banks should re-engage paused international partnerships, renegotiate correspondent arrangements, and align their compliance frameworks with international best practices. Active participation in regulatory sandboxes and industry working groups can ensure that the private sector remains part of the reform process, not a bystander to it.
Avoiding a Return to the Grey List
Delisting is fragile by nature. FATF retains the authority to re-list jurisdictions that backslide on commitments.
To avoid this, Nigeria must institutionalize enforcement rather than rely solely on legislative reform. Laws are important, but consistent investigation, prosecution, and sanctions are what sustain credibility.
Supervision should also become data-driven, leveraging real-time intelligence sharing among the NFIU, CBN, SEC, and customs authorities. Transparency in beneficial ownership registries must be maintained, with access for regulators and reporting entities while safeguarding privacy and preventing misuse.
Crucially, public–private collaboration should be embedded as a permanent feature of Nigeria’s financial integrity framework. Banks and fintechs, often the first to detect suspicious activity, must have clear, trusted channels to report and receive timely regulatory support.
Regulators, for their part, must strike a balance, keeping compliance requirements firm yet innovation-friendly.
Tiered KYC for low-value transactions, proportionate supervision, and continuous capacity building for enforcement officers will help sustain progress without stifling the growth of the digital economy.
A Victory Worth Guarding
Nigeria’s exit from the FATF grey list is a major policy achievement. It reaffirms the country’s capacity to reform under pressure and signals to global partners that its financial system is moving toward greater transparency and accountability.
But this milestone must not be mistaken for the finish line. The true measure of success lies in whether Nigeria can maintain enforcement consistency, deepen institutional coordination, and embed compliance culture across both public and private sectors.
For businesses, the moment calls for renewed discipline and strategic foresight. For regulators, it demands vigilance and continuous reform.
If both sides rise to the occasion, Nigeria stands to gain lower financing costs, deeper global integration, and a stronger digital economy. But if complacency takes hold, the shadow of the grey list could reappear sooner than expected.
The task ahead is clear: reclaim trust, and keep it.
