Click to watchNigeria is no longer on the Financial Action Task Force (FATF) list of jurisdictions under increased monitoring, popularly known as the “grey list.”
The FATF is the global watchdog tackling money laundering, terrorism and proliferation financing. The earliest stages of money laundering are the “placement” and “layering”, where illicit fund is introduced into the legal financial system and quickly moved around, often across jurisdictions, to mask the trail from law enforcement agencies.
FATF’s standards help to coordinate a global response that prevents the infiltration of “bad money” through standards setting for more than 200 participating countries. It also publicly calls out “weak links”, alerting the global financial community to beware of funds to and from such jurisdictions through periodic reports filed three times a year (February, June, and October).
This call-out makes doing international business, or banking with listed institutions, arduous or near impossible. Cross-border payments faced extra checks, and fintechs had to navigate tougher compliance barriers.
At its October 24 plenary meeting, the FATF confirmed that Nigeria—along with South Africa, Burkina Faso, and Mozambique—had met the requirements for removal from the grey list.
Focus on Nigeria and the FATF lists
The FATF added Nigeria to the Grey list in February 2023 for gaps in beneficial-ownership transparency, supervision of non-financial institutions, and the effectiveness of law enforcement. But this wouldn’t be the first time.
In February 2009, under the late President Musa Yar’Adua’s tenure, the FATF added Nigeria to the blacklist for weak and delayed passage of key AML/CFT legislation, poor supervision of financial and non-financial sectors, and low capacity in law enforcement and prosecution of ML/TF offences.
The FATF placed Nigeria on a similar shame list in July 2001. Then, the list was called Non-Cooperative Countries and Territories (NCCTs). Getting off the NCCTs list led to the creation of the Nigerian Financial Intelligence Unit (NFIU), which continues to work with the FATF to ensure alignment with standards.
Nigeria spent five years on the NCCT list before FATF delisted the country in 2006. It also spent four years and four months on the FATF blacklist before its removal in June 2013. This time, it took the country roughly half that period—two years and eight months—to meet the criteria and exit the grey list.
For many international institutions, the stigma of being on the blacklist still lingers and returning to the grey list a decade later probably helped confirm the suspicions of senior compliance officers who have operated in the financial industry for decades.
However, now that Nigeria is off the grey list, will this be the final time?
Implications of the FATF delisting for Nigerian fintechs
Several leaders of Nigerian fintech and venture capital firms, like Olugbenga “GB” Agboola of Flutterwave and Kola Aina of Ventures Platform, have taken to X (Twitter) to celebrate the achievement.
Founder and CEO Agboola said, “Nigeria’s exit from the FATF Grey List is a massive win for our economy…grey listing made cross-border payments/settlements harder & more expensive. This delisting restores confidence, lowers remittance and cross-border costs, and unlocks faster, cheaper payments to and from Nigeria.”
That’s true. In an article published on Condia, Every Nigerian fintech will become a cross-border fintech, I explain the different waves of cross-border payment solutions from Nigeria and their tailwinds. This FATF delisting is about to propel the current wave.
This is because more international financial institutions, which often serve as partner banks or BaaS providers, will delve into serving more Nigerian clients. So, the fintech entrepreneurs have a broader range of partners (e.g. foreign currency account issuers) to choose from, thereby reducing cost through more competitive pricing and improving the reliability of their product through redundancy gains.
Enhanced due diligence requirements that previously slowed onboarding for Nigerian businesses will no longer be necessary, allowing these products to be developed and launched faster. End customers will also benefit, either through cost savings passed on by fintechs or from more competitive pricing driven by the greater availability of options.
In a correspondence with Condia, Compliance leader and Head, Financial Crimes Compliance at Sterling Bank, Olagoke Salawu, said, “delisting doesn’t mean instant de-scrutiny. International partners will keep Nigerian businesses under close watch to ensure reforms are sustained.”
He added that every compliance officer should brace up for the follow-up evaluation in 2026, while protecting the country’s reputation. “For compliance officers, this is not the end. It’s the start of a new phase focused on sustainability and evidence of effectiveness. With another mutual evaluation expected in 2026, every compliance professional has a national duty to ensure Nigeria never slips back.”
On the flip side, fintechs that managed to get banking partners during this era of increased monitoring of Nigerian entities will face more competition and need to think of ways to defend their market share. One way would be to go deeper into their existing relationships to launch more products while demanding better service delivery and pricing from current or new partners.
In conclusion, the news of Nigeria’s removal from the FATF Grey List comes ahead of the global fintech and banking event, Money20/20, happening in the US from October 26-29, 2025. Nigerian Founders now have one more reason why a bank should take them on.
Condia attended last year, and these were some of the African startups at Money20/20 2024 that could be attending in 2025.
Click to watch
