Nigeria’s  Exit from FATF Grey List: What It Means For Everyday Nigerians

Nigeria was on Friday, October 24, 2025 removed from the grey list of the Financial Action Task Force (FATF); the global body responsible for setting standards to combat money laundering and the financing of terrorism.

The decision, taken at the FATF’s October 2025 Plenary in Paris, marks a milestone in Nigeria’s efforts to repair its international financial reputation, and while this has been greeted with applause from government officials and financial regulators, it is worth unpacking what this development actually means for the government, businesses, and the ordinary Nigerian.

Presence on the grey list does not automatically mean a country faces sanctions, but it sends a warning to the international financial community that the country’s systems for preventing illicit financial flows are weak. This often triggers stricter monitoring of transactions, increased compliance costs, and, in many cases, reduced investment and financial cooperation. Nigeria found itself on this list in February 2023 after the FATF identified strategic deficiencies in its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. To reverse the listing, Nigeria had to implement a 19-point action plan agreed with the FATF. Over the past two years, the Federal Government worked closely with both the FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), undertaking sweeping legislative and institutional reforms. Among the key actions were the passage and enforcement of the Money Laundering (Prevention and Prohibition) Act, 2022, and the Terrorism (Prevention and Prohibition) Act, 2022. These laws strengthened the legal basis for tracing and penalizing financial crimes.

The government also launched a Beneficial Ownership Register, designed to enhance corporate transparency by revealing the true owners behind registered companies, a crucial step in preventing the use of shell companies to conceal illicit funds. Furthermore, supervision of designated non-financial businesses and professions, such as real estate firms, casinos, and law practices, was tightened to prevent their exploitation as channels for money laundering. Enhanced inter-agency coordination between the EFCC, NFIU, CBN, and other bodies also helped demonstrate that Nigeria was willing to sustain long-term institutional reforms.

For the government, this removal represents a diplomatic and reputational boost. It signals to international partners that Nigeria is committed to cleaning up its financial systems and adhering to global standards. This improved perception can help the government in negotiations with foreign creditors, development banks, and international investors, who previously viewed Nigeria as a high-risk environment.

It also improves the credibility of the Central Bank of Nigeria and the Ministry of Finance in cross-border transactions, making it easier to access funding or collaborate on global financial initiatives.

What’s The Impact on Nigeria and Nigerians?

For Nigerian businesses, especially companies that depend on foreign partners and cross-border payments,  international banking will now operate in a less restrictive environment. When Nigeria was grey-listed, banks and financial institutions abroad applied extra due diligence to transactions involving Nigerian entities, often leading to delays and higher costs. That layer of suspicion now eases.

This restoration of trust can help attract more foreign direct investment (FDI) into key sectors such as fintech, energy, and manufacturing. It can also make it easier for startups, especially those in remittance and cross-border payments, to form partnerships with global payment processors.

Lower compliance burdens and improved access to international financial networks will give such businesses a competitive edge.

More broadly, investor confidence is likely to improve, which could translate into increased portfolio inflows and greater stability in the capital market.

For the average Nigerian, the benefits might not be immediately visible but are still significant. The first noticeable impact will be on international transactions, particularly remittances. Nigerians receiving money from abroad often faced higher transaction fees and slower transfers because international banks flagged Nigeria as a high-risk country. Now that this tag has been lifted, transaction costs are expected to drop, and transfers will likely move faster.

It also becomes easier for Nigerians abroad or businesses with foreign dealings to open and maintain bank accounts without the red tape often associated with grey-listed nations. Over time, increased foreign investment could lead to more job opportunities as businesses expand and new ones emerge.

The renewed confidence in Nigeria’s financial system might also strengthen the naira slightly, as improved capital inflow eases pressure on foreign exchange demand. The stock market could see a similar uptick as foreign investors, once deterred by regulatory risk, return to Nigerian equities.

Despite this landmark feat, it is important to note that while positive, this development is  not an automatic fix for the country’s broader economic challenges. Nigeria’s removal from the grey list only means it has met the minimum global standards required for AML/CFT compliance. Maintaining that status will require consistent enforcement, transparency, and political will. The FATF will continue to monitor Nigeria’s progress, and any relapse into lax oversight or corruption could put the country back on the list.

Therefore, while the government may celebrate this as a victory, the more meaningful work lies ahead, ensuring that  reforms remain functional and are not merely cosmetic.

Nigeria’s exit from the FATF grey list offers an opportunity to rebuild trust in its financial systems, strengthen business confidence, and ease the everyday burdens of international transactions for ordinary citizens.