• Financing, Report

Nigeria’s Exit from the FATF Grey List

Source: FAFT website

Nigeria’s Exit from the FATF Grey List

Financial Action Task Force (FATF) is the global standard-setting body created in 1989 by the G7 to fight money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

The Task Force researches how criminals and terrorists raise and move illicit funds, promotes international standards (the “FATF Recommendations”) and assesses countries’ implementation of those standards through peer reviews and follow-up.

With more than 200 countries and jurisdictions committed to apply its standards through its global network of regional bodies and partners such as the International Monetary Fund (IMF) and World Bank, the FATF acts as a watchdog: it monitors jurisdictions for strategic deficiencies in AML/CFT frameworks and can list them as “jurisdictions under increased monitoring” (“grey-list”) or “high‐risk jurisdictions” (“black-list”).

The Financial Action Task Force (FATF) formally announced Nigeria’s removal from its list of Jurisdictions under Increased Monitoring (commonly referred to as the “grey list”) during its Plenary session in Paris on October 24, 2025. This decision marks the successful and timely completion of a rigorous two-year reform process initiated after Nigeria’s inclusion on the list in February 2023. This decision means Nigeria is no longer subject to the enhanced scrutiny applied to countries with strategic deficiencies in anti-money-laundering (AML), counter-terrorist-financing (CFT) and proliferation-financing (CPF) regimes.

The FATF’s public statement specifies that Nigeria, along with Burkina Faso, Mozambique and South Africa, completed the required action plan and thus was removed from increased monitoring. Although Nigeria had faced previous FATF listings and monitoring processes in 2013.

Why it matters

Being on the grey list signalled that Nigeria had significant strategic deficiencies in its AML/CFT/CPF framework, weaknesses in regulation, supervision, inter-agency coordination, beneficial-ownership transparency and financial intelligence sharing.

Grey-listing carries practical implications such as increased due diligence by international banks, higher compliance costs, risk of correspondent-bank relationships being curtailed, and dampened investor confidence.

Being removed goes a long way to improve the country’s financial integrity and transaction credibility. This has a positive impact on the country’s ability to increase transactions around cross-border banking, trade finance, remittances and global capital flows.

Possible implications for the Nigerian economy
  • Improved investor confidence: For international investors, viewing Nigeria as a lower-risk jurisdiction from an AML/CFT perspective improves terms of finance.
  • Lower cost / improved access to global finance: Transaction costs (especially in banking, trade finance & remittances) could see a substantial reduction, while access to international capital markets could improve.
  • Boost for fintech and trade sectors: Nigeria’s growing fintech ecosystem and trade flows may benefit from smoother cross-border transactions and improved interoperability with global financial networks.
  • Enhanced macro-policy credibility: The delisting offers a reputational boost for Nigeria’s reform programme (monetary, fiscal and institutional). It may assist in stabilising the currency, attracting diaspora remittances, and reducing capital flight concerns.
  • Foreign Direct Investment (FDI) and Capital Access: The most significant long-term benefit of the delisting is the positive correlation between financial integrity and increase access to foreign capital. The impact extends particularly to institutional investors, such as global pension funds, sovereign wealth funds (SWFs), and large insurers. These entities often operate under strict mandates that explicitly restrict or prohibit investment in jurisdictions designated as high-risk by organizations like the FATF. The removal of the grey list status effectively unlocks access to vast pools of global long-term capital.
Key risks and caveats

Nigeria’s removal from the FATF grey list marks a significant milestone. Sustaining the achievement requires continuous reform and strong institutional enforcement of AML/CFT frameworks, as any policy relapse could quickly reverse the gains. The delisting only tackles one dimension of Nigeria’s risk profile; underlying macroeconomic challenges such as high inflation, foreign exchange instability, fiscal deficits, the large informal sector, and persistent security concerns continue to weigh on investor confidence and growth potential. Moreover, the measurable benefits of the FATF delisting will take some time to discern, as improved access to global finance and restored correspondent banking relationships depend on consistent policy credibility and gradual rebuilding of international trust.

Based on the timelines of similar countries, Nigeria’s next full FATF Mutual Evaluation is anticipated around 2028. The failure to embed current improvements and secure long-term sustainability could lead to an unfavourable assessment during that evaluation, thereby heightening the risk of re-listing and undermining recent progress.

Furthermore, a critical observation from the November 2024 follow-up report (FUR) highlights the existence of several technical gaps despite the overall success in demonstrating effectiveness. Specifically, several recommendations concerning crucial risk areas were still rated as Partially Compliant (PC), including

R. 12 Politically Exposed Persons (PEPs): Vulnerability exists in the framework for adequate monitoring and mitigation of risks associated with domestic and foreign PEPs.

R. 15 (New Technologies): The regulation of emerging financial products, particularly Virtual Asset Service Providers (VASPs) and related new technologies, remains underdeveloped.

R. 22 Designated Non-Financial Businesses and Professions (DNFBPs) Customer Due Diligence (CDD): Continued weaknesses are present in the full implementation and enforcement of Customer Due Diligence (CDD) requirements across the full spectrum of Designated Non-Financial Businesses and Professions.

Recommendations for stakeholders
  • Government / Regulators: The Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU) and Ministry of Finance should continue to strengthen beneficial-ownership registries, financial intelligence sharing, supervision of high-risk sectors (fintech, remittances, cross-border trade), and embed the reforms into institutional systems to ensure sustainability.
  • Banks & Fintech firms should use the improved standing to renegotiate correspondent banking access, expand international partnerships, enhance cross-border remittance/payment services, and scale trade-finance solutions, while maintaining strong AML/CFT compliance.
  • Investors should reassess Nigeria’s country-risk premium in light of the delisting. However, it is expected that investors would continue to evaluate macro-economic and governance risks.
Conclusion

Nigeria’s exit from the FATF grey list is a significant institutional and reputational milestone, signalling that the country has addressed key deficiencies in its AML/CFT framework. While this alone does not equate to total eradication, it is a critical step towards opening up a clearer path for improved access to global finance, stronger cross-border trade, fintech-powered remittances and enhanced investor confidence. The ultimate payoff will depend on sustained reform, improved macroeconomic policies, and regulatory oversight working together to rebuild the trust of the global financial system.

References
  1. FATF, Outcomes FATF Plenary, 22-24 October 2025. FATF
  2. https://www.fatf-gafi.org/en/publications/Mutualevaluations/fur-nigeria-2024.html
  3. FATF, Jurisdictions under Increased Monitoring – 24 October 2025. FATF
  4. “Nigeria’s removal from FATF grey list marks boost for financial credibility – CBN”, Premium Times, 26 October 2025. Premium Times Nigeria
  5. “What Nigeria’s delisting from the FATF Grey List means for the economy”, Daily Trust, 27 October 2025. Daily Trust
  6. “Nigeria’s exit from the FATF grey list: A major boost to President Tinubu’s economic and monetary reforms”, BusinessDay, 26 October 2025. Businessday NG
  7. “South Africa, Nigeria exit global financial crime watch list”, Reuters, 24 October 2025. Reuters
  8. “South Africa and Nigeria removed from money laundering ‘grey list’”, Financial Times, 24 October 2025. Financial Times
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Jhaysec
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Jhaysec
2 days ago

Insightful post

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MPC LOWERS INTEREST RATE AMID DISINFLATIONARY TREND

At the conclusion of the 302nd Monetary Policy Meeting (MPC) on 22nd and 23rd September 2025, the MPC voted to cut the Monetary Policy Rate (MPR) by 50 basis points from 27.50% to 27%, marking the first interest rate cut since September 2020.

Other key decisions include a reduction of the Cash Reserve Ratio (CRR) for Deposit Money Banks (DMB) by 500bps to 45.00%, while keeping the CRR for Merchant Banks at 16.00%. The MPC also retained the Liquidity Ratio at 30.00% and adjusted the Asymmetric Corridor to +250/-250bps around the MPR. Additionally, a 75.00% CRR on Non-TSA public sector deposits was introduced.

Interest Rate

This reflects a shift from the hawkish stance of the MPC since its monetary policy tightening cycle in 2023, with the intention to curb inflation. The MPR was raised from 18.50% in 2023 to 27.50% in November 2024, which was maintained in 2025.

Nigeria’s headline inflation eased for the fifth consecutive month in August 2025 to 20.12%, largely driven by the rebasing effect, a reduction in food and core inflation components, and relative stability in the Naira.

Inflation Rate

The Global View

The CBN’s decision to lower the interest rate is in line with the global monetary authorities. The US Federal Reserve cut the federal funds rate by 25bps in September 2025, bringing it to 4.00%–4.25%. Conversely, the BoE and the ECB held rates steady at 4% and 2.15% respectively, following a monetary easing cycle since 2024.

Shifting gaze to Africa, Ghana implemented a 350bps rate cut to 21.5% in September. Similarly, the Central Bank of Kenya and the Central Bank of Egypt lowered their interest rates by 25bps and 200bps to 9.5% and 22%, respectively, while the South African Reserve Bank left its interest rate unchanged at 7%.

The CBN’s move to lower interest rates is backed by the continued disinflationary trend, resilient output growth, stable exchange rate, and robust external reserves. The MPC noted their satisfaction with macroeconomic stability as shown by improved inflation, stable Naira, stronger economic growth and robust FX reserves.

Impact Of Rate Cut

The CBN’s 50bps rate cut to 27%, reduction of banks’ CRR to 45% and the adjusted Asymmetric Corridor to +250/-250bps signal a shift toward stimulating growth after years of tight policy.

For banks, this provides improved liquidity, lower funding costs, and opportunities to expand credit to households and businesses (Corporate and SMEs). The move may also support asset quality as borrowers face reduced debt servicing costs, while easing could lift investor sentiment toward banking stocks and drive moderate margin improvements. The CBN’s imposition of a 75% CRR on non-TSA public deposits also drains liquidity, partly offsetting the benefits of the easing.

For the fixed income market, yields are likely to decline as liquidity improves and borrowing costs fall, lifting prices in the short term. This offers existing bondholders capital gains.

Overall, the policy creates a more enabling environment for lending, investment and growth in the economy. We expect a cautious easing stance from the CBN in the next meeting.

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The Market Wrap Podcast

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What the Podcast Delivers

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  • Financing, Venture Capital

The Venture Capital Landscape: BRB’s Perspective

Accelerating Economic Development, the VC way

Venture capital (VC) has emerged as a catalyst in Nigeria’s journey toward sustainable economic growth and diversification. Traditionally reliant on oil and gas, the Nigerian economy is undergoing a paradigm shift toward innovation, entrepreneurship, and technology-driven solutions. VC is at the heart of this transformation, providing the critical financial resources, expertise, and strategic support that early-stage and high-growth startups require to thrive.

VC funding accelerates the development of sectors vital to Nigeria’s economic future, including financial technology (fintech), agriculture, clean energy, healthcare, and logistics. By backing entrepreneurs who address local challenges with scalable solutions, venture capital not only fosters the growth of individual businesses but also stimulates job creation, boosts productivity, and drives the adoption of new technologies across the broader economy.

By bridging the financing gap for startups and supporting Nigeria’s young and dynamic population, VC is catalysing a new generation of enterprises that are reshaping Africa’s economy. Its continued expansion is fundamental to unlocking Nigeria’s potential and achieving inclusive, technology-driven prosperity. Over the past decade, Nigeria has emerged as a pivotal hub for technology startups in Africa, driven by factors such as a burgeoning youth population, increasing internet penetration, and a growing appetite for digital solutions.

2024 VC Trends: Investment Climbs Globally, Contracts in Africa

According to the 2024 AVCA report, global venture capital investment reached US$313.6 bn, marking a 10% increase from the US$285.2 bn recorded in 2023. This figure accounts solely for VC deal volume and value, with deal values including Mezzanine and debt when the latter is part of a larger transaction that also involves equity. In contrast, Africa VC activity experienced a downturn in 2024, with US$2.6 bn invested across 427 deals, down from US$3.6 bn and 545 deals in 2023. This represents a 28% decline in value and a 22% drop in volume, highlighting a contraction in funding activity across the continent.

Despite this pullback, the 2024 figures suggest that Africa’s venture capital landscape may be approaching its peak. Notably, multi-region startups are shifting away from pan-African expansion strategies in favour of broader emerging market growth models. Leveraging later-stage capital, these startups are increasingly scaling into new geographies such as Southeast Asia, Latin America, and other developing regions, reflecting a strategic pivot toward global market diversification amid changing funding dynamics

The “Big Four” Dominate as FinTech Attracts the Lion’s Share of Funding

In 2024, West Africa maintained its lead in deal volume for the fourth consecutive year, driven primarily by Nigeria, which was the most active country by volume, accounting for 16% of deals. Despite lower volumes, multi-region deals garnered the highest total capital, while the ‘Big Four’ markets Nigeria, Egypt, Kenya, and South Africa continued to dominate, collectively accounting for 55% of total deal volume and 64% of capital deployed.

Despite a modest dip in total capital, the financial technology sector remains the star performer among African VC firms. In 2024, FinTech and Digital Banks led the market, accounting for 116 deals (34% of all tech-enabled rounds) and attracting US$1.4 billion in funding. This dynamic sector encompasses cryptocurrency platforms, embedded finance, and mobile wallets specifically designed for Africa’s largely unbanked population. Its continued dominance reflects both local demand and global trends, as digital banking solutions reshape access to financial services worldwide.

In 2024, African digital banks not only demonstrated strong regional appeal but also established a strong presence on the global stage. Tyme Bank’s US$250 million Series D ranked as the third-largest digital banking investment worldwide, while Moniepoint’s US$110 million Series C was the sixth-largest. An ongoing focus on Financials drove this momentum: 44% of deals originated in the sector, capturing half of the region’s total capital, trailed by the Information Technology (14%) and Consumer Staples (11%) sectors. The e-commerce and health care sectors witness declines in 2024, largely driven by a challenging operational environment, specifically, barriers to cost-effective growth and customer acquisition

The Nigerian Tech Startups 2024 Trend

Shifting focus to Nigeria, startups in the country secured approximately $410 million in funding in 2024, according to data from ‘Africa: The Big Deal.’ This figure remains the same as 2023, indicating a relatively stable funding environment despite broader market headwinds.

Notably, two major transactions, Moove’s $110 million raise and Moniepoint’s $110 million Series C round, accounted for over half of the total capital raised, underscoring the continued investor confidence in high-growth, later-stage Nigerian startups.

In Nigeria, the venture capital market is experiencing a shift towards funding startups that integrate sustainability and social impact into their business models. This shift is largely driven by a younger generation that values ethical practices and demands transparency from companies.

The following is a summary of the top venture capital deals in Nigeria in 2024.

S/N Startup Sector Amount Raised Lead Investors
1
Moove
Mobility tech
$110M
Mubadala, The Latest Ventures, AfricInvest, Palm Drive Capital, Triatlum Advisors, and Future Africa
2
Moniepoint
Fin tech
$110M
Development Partners International (DPI), Google’s Africa Investment Fund, Verod Capital, and Lightrock.
3
Yellow Card
Blockchain
$33M
Blockchain Capital, Coinbase, Kraken, OpenSea and Worldcoin.
4
Konexa
Renewable Electricity
$18M
Climate Fund Managers (CFM) and Microsoft’s Climate Innovation Fund
5
Tomato Jos
Agri Business
$12.2M
N/A

BRB’s Perspective: Our take on Venture Capital

At BRB Capital, we understand that the entrepreneurial journey is fraught with challenges, from securing early-stage funding to scaling a fast-growing enterprise. As a growing Nigerian investment firm with a global presence perspective, we see venture capital (VC) as a powerful instrument for fueling innovation, stimulating economic growth, and supporting visionary founders. We have financed high-potential startups and growth-stage businesses, enabling them to thrive in Nigeria’s dynamic marketplace and beyond.

BRB’s Approach to Venture Capital

A. Sector Focus

At BRB Capital, we prioritise sectors where we see the most potential for disruption and sustainable impact in Nigeria and the broader African context. These include

SECTOR SUBSECTOR AND FOCUS
Technology and Innovation
fintech, e-commerce, software-as-a-service, healthtech, edtech, regtech, insuretech, paytech
Agribusiness and Food
sustainable agriculture, food processing, logistics, sustainable land use, circular economy
Energy and Infrastructure
Renewable power solutions, energy efficiency, smart grids
Consumer Goods and Services
FMCG, retail, lifestyle brands

B. Staged Investments

We support businesses at various stages of growth, whether you are an early-stage startup looking for seed funding or a growth-stage enterprise seeking Series A or beyond. Our staged approach allows us to partner with entrepreneurs at various stages of their journey, helping them secure the necessary capital to innovate, refine their business models, and penetrate new markets.            

C. Hands-on Advisory

Funding alone is seldom enough to ensure success. Our team of industry specialists and operational experts complements funding by collaborating with portfolio companies to provide strategic guidance, market intelligence, and mentorship. We help founders navigate challenges such as product development, market entry, regulatory compliance, team building, and governance.

D. Responsible Investment

At BRB Capital, we prioritise responsible investing. We believe in supporting companies that create positive social, economic, and environmental outcomes. By adhering to robust Environmental, Social, and Governance (ESG) principles, we strive to ensure that our investments are inclusive and purpose-driven.

Conclusion?

In conclusion, Nigeria’s venture capital ecosystem remains a cornerstone of innovation and economic diversification in Africa, despite the challenges posed by currency volatility, regulatory uncertainties, and infrastructure gaps. The persistent investor interest, especially in fintech, clean energy, and B2B commerce sectors, highlights the country’s vast potential to foster scalable, impact-driven startups that address real economic and social needs. With emerging policy reforms and growing collaboration between local and international investors, the Nigerian VC market is poised for resilient growth and continued leadership in the continent’s entrepreneurial landscape.

Looking ahead, sustaining this momentum requires fostering operational efficiency, enhancing regulatory clarity, and expanding infrastructure to unlock the full potential of Nigeria’s young, tech-savvy population. Venture capital will remain a critical enabler for innovative solutions that drive job creation, financial inclusion, and sustainable development. As Nigerian startups increasingly navigate global markets and adopt pragmatic growth models, the ecosystem is well-positioned to deliver significant economic value and cement Nigeria’s status as Africa’s foremost hub for venture investment.