In a significant milestone for Nigeria's financial sector, the country has successfully exited the Financial Action Task Force's Grey List, marking a triumph for institutional reform and international credibility.
From Grey List to Green Light: Nigeria's Reform Journey
The Financial Action Task Force (FATF), the global watchdog created by G7 nations to protect the international financial system, officially removed Nigeria from its Grey List on October 24, 2025. This decision comes after the country spent over two years under heightened monitoring for deficiencies in combating money laundering and terrorist financing.
Nigeria's placement on the Grey List in February 2023 had immediate and severe economic consequences. International banks grew cautious about processing Nigerian transactions, trade financing became more expensive, and foreign direct investment flows slowed significantly. These challenges threatened to undermine broader macroeconomic reforms already underway in Africa's most populous nation and fourth-largest economy.
The Comprehensive Reform Strategy
What distinguished Nigeria's approach was not mere technical compliance with FATF requirements, but genuine institutional transformation. The administration of President Bola Ahmed Tinubu adopted a mission-driven, whole-of-government strategy to overhaul the country's financial system.
The reform process began in 2022 with the passage of two critical laws: the Money Laundering (Prevention and Prohibition) Act and the Terrorism (Prevention and Prohibition) Act. However, legislation alone wasn't sufficient. The government moved decisively to implementation, particularly through the operationalization of a beneficial ownership register - a crucial tool for enhancing corporate transparency that demanded close coordination among multiple agencies.
Hafsat Abubakar Bakari, leading the Nigerian Financial Intelligence Unit, supervised the execution of FATF's 19-point action plan. In early 2025, with the compliance deadline approaching, Bakari mobilized several government agencies to complete the three remaining items, demonstrating the institutional agility necessary to meet international standards.
Equally vital was the role of the Office of the National Security Adviser under Nuhu Ribadu, which ensured seamless coordination among law-enforcement and intelligence bodies. This improved the detection of cross-border currency violations and strengthened the prosecution of financial crimes.
Broader Economic Impact and Continental Significance
The financial reforms complemented wider economic measures, including the elimination of fuel subsidies, harmonization of foreign-exchange rates, and fiscal tightening. As Finance Minister Wale Edun emphasized, the objective was never simply to exit the Grey List but to improve governance and bolster institutional credibility across all sectors.
The results are already evident. Nigeria has been invited to join the FATF's Guest Jurisdictions Initiative, allowing the country to participate in the organization's meetings under its own flag - a clear indicator of restored international trust. More importantly, the successful reforms have reduced transaction costs, improved access to global finance, and boosted investor confidence.
Nigeria's achievement forms part of a broader African success story. Three other African nations - South Africa, Mozambique, and Burkina Faso - were also removed from the Grey List in late October. As FATF President Elisa de Anda Madrazo noted, the simultaneous removal of four African countries from the watchdog's monitoring list represents a "positive story for the continent."
Three Crucial Lessons for Emerging Economies
Nigeria's experience offers valuable insights 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 fundamentally.
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 levels of government.
While the reform process continues, Nigeria's exit from the Grey List serves as a powerful reminder that meaningful institutional transformation is achievable even in challenging environments. The country's restored financial credibility provides a solid foundation for attracting the investment needed to build infrastructure, create jobs, foster inclusive growth, and achieve President Tinubu's ambitious goal of raising GDP to $1 trillion by 2030.
