ABUJA – On October 24, the Financial Action Task Force (FATF), the body created by the G7 to combat threats to the international financial system, removed Nigeria from its Grey List of countries subject to heightened monitoring for failing to curb money laundering and terrorist financing. More than a diplomatic achievement, this milestone shows that comprehensive institutional reform is possible even in highly challenging environments.
Nigeria’s addition to the FATF’s Grey List in February 2023 had significant economic consequences for Africa’s most populous country and fourth largest economy. International banks became increasingly wary of Nigerian transactions, trade finance grew more expensive, and inward foreign direct investment slowed. These headwinds also threatened to derail broader macroeconomic reforms that were already underway.
What enabled Nigeria to exit the list was not merely technical compliance with FATF standards, but genuine institutional transformation. Rather than ticking items off a checklist, President Bola Ahmed Tinubu’s administration adopted a mission-driven, whole-of-government approach to reforming Nigeria’s financial system.
The reform process began in 2022 with the enactment of the Money Laundering (Prevention and Prohibition) Act and the Terrorism (Prevention and Prohibition) Act. It then moved from legislation to implementation with the operationalisation of a beneficial ownership register – a vital tool for enhancing corporate transparency that required close coordination among financial regulators, the Corporate Affairs Commission, and various law-enforcement agencies.
The Nigerian Financial Intelligence Unit, led by Hafsat Abubakar Bakari, oversaw the implementation of the FATF’s 19-point action plan. In early 2025, just weeks before the compliance deadline, Bakari mobilised several government agencies to complete the three remaining items, illustrating the level of institutional agility needed to meet international standards.
Equally crucial was the Office of the National Security Adviser, led by Nuhu Ribadu, which ensured seamless coordination among law-enforcement and intelligence bodies. This improved the detection of cross-border currency violations and facilitated the prosecution of financial crimes.
As Minister of State for Finance, I was tasked with coordinating reform efforts across several regulatory agencies. Working with the National Insurance Commission, we tightened oversight of the insurance sector. In collaboration with the Nigeria Customs Service, we enhanced border enforcement. And together with the Securities and Exchange Commission and the Central Bank of Nigeria, we aligned capital market regulation with international standards, culminating in the passage of the 2025 Investment and Securities Act.
These financial measures complemented broader economic reforms – including the elimination of fuel subsidies, the harmonisation of foreign-exchange rates, and fiscal tightening – that underscored Nigeria’s commitment to building a transparent, rules-based economy. As Finance Minister Wale Edun noted, our goal was never simply to exit the Grey List but to improve governance and bolster institutional credibility across the board.
The results are already visible. Nigeria has been invited to join the FATF’s Guest Jurisdictions Initiative, allowing it to participate in the organisation’s meetings under its own flag – a clear sign of renewed international trust. More importantly, successful reforms have reduced transaction costs, improved access to global finance, and boosted investor confidence.
Notably, Nigeria’s achievement is not an isolated one. Three other African countries – South Africa, Mozambique, and Burkina Faso – were also removed from the Grey List in late October. As FATF President Elisa de Anda Madrazo, a former director-general in the Ministry of Finance and Public Credit of Mexico, observed, the simultaneous removal of four African countries from the organisation’s watchlist is a “positive story for the continent,” showing that when emerging economies muster the political will to carry out far-reaching reforms, the international financial system takes notice.
Nigeria’s experience offers three key lessons for other jurisdictions facing similar challenges. First, grey-listing by FATF should be viewed not merely as a reputational setback, but as an opportunity to strengthen public institutions. Second, lasting reform requires coordinated action across multiple government agencies – financial regulators, law enforcement, customs, and corporate registries – rather than isolated compliance efforts. Lastly, political leadership is indispensable, as reforms of this magnitude demand sustained commitment at the highest level.
To be sure, the reform process is far from complete. Maintaining compliance will require continued vigilance, capacity building, and the ability to adapt to evolving forms of financial crime. Nigeria’s next FATF mutual evaluation, scheduled for 2027, will test the resilience of the country’s recent gains.
For now, however, Nigeria’s exit from the Grey List should serve as a powerful reminder that meaningful reform is possible. The country’s restored financial credibility provides a solid foundation for attracting the investment Nigeria needs to build infrastructure, create jobs, foster inclusive growth, and achieve Tinubu’s ambitious goal of raising GDP to $1 trillion by 2030. The challenge ahead is to ensure that this progress marks the beginning of sustained institutional transformation, rather than a fleeting victory.
Uzoka-Anite is Nigeria’s Minister of State for Finance.
Copyright: Project Syndicate, 2025.
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