Nigeria’s exit from the Financial Action Task Force (FATF) grey list has restored global confidence in the country’s financial system and saved the economy from losing more than $30 billion in potential investments.
This is according to the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, who made the disclosure on Friday at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Describing the exit as “one of the most significant achievements this year,” the CBN governor explained that Nigeria’s removal from the grey list resulted from a coordinated nationwide effort led by the Federal Government, with inputs from the CBN.
He said, “Nigeria’s grey-listing carried a significant cost: countries in this category typically experience a 7.6% of 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 explained that Nigeria implemented a comprehensive set of reforms and institutional enhancements to address the deficiencies highlighted by FATF during its on-site assessment.
These reforms, he said, involved strengthening the supervision of financial institutions, improving the quality and consistency of reporting for suspicious and cross-border transactions, and deepening intelligence-sharing among relevant agencies.
He added that the deployment of modern governance tools, including the Electronic Financial Evaluation Monitoring System (EFEMS) and the Foreign Exchange (FX) Code, played a crucial role in tightening oversight and ensuring greater transparency across the financial system.
Backstory
In October, global watchdog, FATF said it has removed Nigeria from its grey list, ending nearly three years of being tagged a destination for dirty money and signaling a boost for investor confidence in the nation’s economy.
Nigeria was removed from the list alongside South Africa, Burkina Faso, and Mozambique after their governments stepped up efforts to combat money laundering and terrorist financing.
Nigeria’s exit from the FATF grey list represents a confidence boost for its financial system and broader economy.
What you should know
Nairametrics reported that the Naira showed signs of stabilization and slight strengthening against the US dollar following Nigeria’s exit from the FATF grey list.
President Bola Tinubu welcomed the delisting of Nigeria from the grey list of the FATF, describing the development as a clear demonstration of the country’s commitment to global financial transparency.
The FATF is the world’s foremost standard-setting body responsible for combating money laundering, terrorist financing, and proliferation financing.