The European Union’s (EU) announcement that Nigeria has been removed from its list of high-risk jurisdictions for money laundering and terrorism financing underscores the success of the Central Bank of Nigeria’s (CBN) reforms. It highlights growing transparency, stronger compliance in the financial sector, and effective implementation of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) measures, reports Assistant Editor COLLINS NWEZE
Nigeria’s exit from the EU’s High-risk List is expected to enhance global trust and partnership for the domestic economy. It is also an indication that Nigeria’s financial sector has experienced major transformation in recent years, following reforms in the sector. From exchange rate unification, increasing regulatory guidance, transparency in the forex market operations, enhanced surveillance in financial flows to the economy.
A large part of these reforms and policy implementations have brought significant benefits to the economy. A remarkable gain was the recent European Union (EU), removal of Nigeria from its list of high-risk jurisdictions for money laundering and terrorism financing, alongside South Africa and four other African countries.
The move was generally seen by analysts as providing a further fillip to Nigeria’s economic prospects. A statement published on the European Commission’s website said: “The European Commission, in its assessment, concluded that Nigeria has significantly strengthened the effectiveness of its AML/CFT regime and satisfactorily addressed the technical and strategic deficiencies highlighted by the FATF site, the move reflects decisions taken by the Financial Action Task Force (FATF) at its June and October 2025 plenaries, where several countries were removed from the list of “Jurisdictions under Increased Monitoring,” commonly referred to as the grey-list.
The statement also said that the move means that enhanced due diligence requirements applied to transactions involving Nigeria and other delisted countries will be lifted from January 29, 2026, subject to procedural approval by the European Parliament and the Council. Analysts note that like its removal the FATF grey-list, Nigeria’s removal from the EU high-risk list also has significant economic and financial implications for the country.
The fact remains that being classified as a high-risk jurisdiction often leads to higher transaction costs, delayed payments, restricted correspondent banking relationships, and reduced foreign investment. Nigeria was removed from the FATF grey-list in October last year after implementing a series of reforms aimed at strengthening its anti-money laundering and counter-terrorism financing (AML/CFT) regime.
CBN Governor, Olayemi Cardoso, earlier said the deployment of the Electronic Forex Market Surveillance System (EFEMS), the shift to a single, market-determined foreign exchange rate regime, and enhanced risk-based banking supervision – underscore CBN’s track record of reform delivery. They have strengthened Nigeria’s capacity to absorb external shocks, from volatile oil prices to shifts in credit rating sentiment.
“In 2026, we will deepen engagement with stakeholders, strengthen collaboration with other regulators and international partners, and foster responsible innovation across the financial system. We will continue to provide forward guidance, protect the integrity of our financial markets, leverage technology and AI to improve decision‑making, and build institutional capacity to support an evolving and resilient financial system,” he said.
Reforms’ contributions to high-risk exit
On assumption of office, the apex bank leadership led by Cardoso swung into action, dismantling the roadblocks and opaqueness in the financial system that put Nigerian on the EU list. From reforms in the bureau de change operations, which falls within the other financial sector segment of the economy, to the increase in surveillance and supervision of the deposit money banks, the CBN left no stone unturned to ensure that Nigeria exits the grey list.
Part of the compliance records include Nigeria’s lenders being able to identify the beneficial owner, and taking reasonable measures to verify the identity of the beneficial owner, such that they become satisfied that beneficial owner in every transaction is known. As required by the law, the Nigeria’s financial institutions are also able to understand the ownership and control structure of their customers, obtain information on the purpose and intended nature of the business relationship and conduct due diligence on the business relationship. They equally ensured that scrutiny of transactions are undertaken throughout the course of every banking relationship.
President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, described Nigeria’s exit from the EU list as an excellent development, for the country. He praised the CBN’s efforts at ensuring that Nigeria is no longer burdened by the grey list challenges, following its exit. He said: “It opens new approach and opportunities in Nigeria banks and customers dealings with international financial institutions. It shows that Nigeria’s financial system is safe for payments and other transactions. It is worth celebrating by all Nigerians,” he said. Ogubunka advised that government should do more to ensure that Nigeria does not relapse, or return into the list by continuing to do things right.
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More views from stakeholders
Reacting to the country’s removal from the FATF grey list in a statement it issued at the time, the CBN said the move recognised “significant improvements in Nigeria’s regulatory, supervisory, and enforcement frameworks, particularly in combating money laundering, terrorist financing, and proliferation financing.”
It also added that the development “marks an important milestone in the country’s continuing efforts to strengthen financial system integrity, transparency, and international confidence.” The statement identified key reforms assessed by the FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), FATF’s regional assessment body.
These include: Strengthened oversight of financial institutions through updated AML/ CFT regulations, risk-based supervision, and fit and-proper assessments; expansion of compliance reporting and monitoring across remittance channels, Bureaux De Change, and fintech platforms to improve traceability and transparency; enhanced inter-agency data sharing and enforcement coordination between the CBN, the Nigerian Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission ( EFCC), and law-enforcement bodies and implementation of market governance tools, including the Foreign Exchange Code (FX Code) and Electronic Foreign Exchange Matching System (EFEMS).
Furthermore, the statement said: “Nigeria’s removal from the grey list will yield tangible benefits for businesses and households alike including – lowering compliance costs, improving access to international finance, and making cross-border transactions faster and more affordable. In time, these gains will translate into smoother trade settlements, quicker remittance inflows, and even more predictable access to foreign exchange – enhancing livelihoods, supporting enterprise growth, and deepening financial inclusion.
“The FATF decision reinforces the broader restoration of global confidence in Nigeria’s economic management. Recent international assessments underscore this momentum, with Moody’s and Fitch upgrading Nigeria’s ratings outlook on the back of stronger external balances, credible policy execution, and renewed monetary-policy credibility.”
It also quoted Cardoso as saying: “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system.
“It reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.”
Also, the CBN and Bank of Angola Memorandum of Understanding (MOU), signed late 2025, represents a major step to strengthen financial sector regulations and fight money laundering. Cardoso, who signed on behalf of the CBN alongside the Governor of the Central Bank of Angola, Manuel Antonio Tiago Diaz, noted that the MoU aligns with Africa’s broader goals of economic integration and financial stability. Both apex bank leaders said the partnership marks a critical development between the two institutions in their efforts to deepen bilateral cooperation and technical exchange.
Both institutions are by the MoU expected to establish a bilateral forum for the reciprocal exchange and sharing of technical assistance between the authorities to enhance capacity in the execution of their respective Central Bank functions. They are also expected to cooperate and collaborate in the cross-border supervision of authorized institutions and exchange of cybersecurity information between them.
According to them, the institutions are to partner on licensing, supervision, resolution planning and implementation of resolution measures for cross-border financial establishments. They are also to ensure transparent and smooth periodic exchange of information as well as define procedures for exchange of information. The cooperation will also extend to exchange control, financial markets and foreign reserves management, currency management and economic research.
The partnership further extends to payment, clearing and settlement systems management, financial sector development, banking supervision and regulation as well as Anti-Money Laundering and Countering the Financing of Terrorism. Both central bank leaders said it is their hope that the outcome of the MoU implementation will be a win-win for both parties.
Cost of grey list to economy grey-listing of Nigeria carried a significant cost translating to more than $30 billion in potential investments. Cardoso said: “Nigeria’s grey-listing carried a significant cost: countries in this category typically experience a 7.6 per cent of Gross Domestic Product (GDP) drop in capital inflows in the first year, for Nigeria, that translates to more than USD $30 billion in potential investment. Exiting the list therefore signals a major restoration of confidence and eases compliance frictions for correspondent banks.”
Cardoso said the global financial community has welcomed Nigeria’s exit, noting improved access to international finance and smoother cross‑border payments. He explained that one of the most significant achievements this year was Nigeria’s exit from the FATF grey list.
“This milestone was the result of a coordinated national effort led by the Federal Government, with critical contributions from the Central Bank of Nigeria, the Ministry of Justice, the NFIU, the EFCC, and our regional partners. Through stronger supervision, improved reporting standards, enhanced intelligence‑sharing, and governance tools such as the FX Code, we addressed the deficiencies identified by FATF during its on‑site assessment,” he said.
X-ray on economy
In the Global Economic Prospects report, the World Bank upgraded Nigeria’s economic growth forecast for 2026 to 4.4 per cent, from the 3.7 per cent projection it had announced for the country in June 2025. The report said: “Growth in Nigeria is forecast to strengthen to 4.4 per cent in both 2026 and 2027—the fastest pace in over a decade. This further firming of growth is anticipated to be underpinned by a continued expansion in services and a rebound in agricultural output, with a modest acceleration in non-oil industry.
“Economic reforms, including in the tax system, along with continued prudent monetary policy, are expected to continue supporting activity. They are also expected to improve investor sentiment and reduce inflation further. Higher oil output is expected to offset lower international oil prices this year, helping to boost fiscal revenues and strengthen the external balance.”
The apex bank appeared to have set the ball rolling in terms of forecasting positive economic outlooks for the country, when in its macroeconomic outlook for 2026, released last month, it made optimistic projections for the nation’s economy. The apex bank stated: “The year 2026 presents a realistic window of opportunity for macroeconomic stabilisation. The Nigerian economy is expected to continue expanding, with growth projected at 4.49 per cent in 2026. The projection is hinged on continued gains from broad-based structural reforms and a gradually easing monetary policy stance.”
