Nigeria's long-anticipated removal from the European Union's list of high-risk jurisdictions for money laundering and terrorism financing is more than a symbolic victory. Not a few people see it as a concrete validation of the sweeping financial-sector reforms driven by the Central Bank of Nigeria (CBN) and a clear signal that years of weak oversight, opaque forex practices, and compliance lapses are giving way to a more transparent and rules-based system.
For many industry experts, the EU's decision underscores the growing effectiveness of Nigeria's Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework and reflects rising confidence in the country's financial governance.
For one of Africa's largest economy, the implications extend far beyond regulatory recognition -- touching foreign investment flows, correspondent banking relationships, cross-border payments, and Nigeria's broader credibility in the global financial system.
Over the past two years, Nigeria's financial sector has undergone a far-reaching transformation. Central to this shift has been the unification of the exchange rate, strengthened regulatory guidance, improved transparency in forex market operations, and enhanced monitoring of financial flows across the economy.
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The reforms--many of them politically difficult and operationally complex--have begun to deliver measurable gains. Among the most significant is the European Union's decision to delist Nigeria, alongside South Africa and four other African countries, from its high-risk jurisdictions register.
Market analysts widely interpret the move as a major boost to Nigeria's economic prospects, particularly at a time when global capital is increasingly sensitive to governance, compliance, and transparency standards.
In a statement published on the European Commission's website, the EU confirmed that Nigeria had "significantly strengthened the effectiveness of its AML/CFT regime and satisfactorily addressed the technical and strategic deficiencies" earlier identified by the Financial Action Task Force (FATF).
The Commission said that the decision reflects resolutions taken at the FATF's June and October 2025 plenaries, where Nigeria was removed from the list of "Jurisdictions under Increased Monitoring" -- commonly referred to as the grey list.
Crucially, the EU also disclosed that enhanced due-diligence requirements applied to transactions involving Nigeria will be lifted from January 29, 2026, subject to final procedural approvals by the European Parliament and the Council.
Nigeria's removal from the EU's high-risk list mirrors--and amplifies--the economic impact of its earlier exit from the FATF grey list. High-risk classification typically translates into higher transaction costs, delayed international payments, restricted correspondent banking ties, and reduced foreign investment appetite.
Nigeria exited the FATF grey list in October last year after implementing a series of reforms aimed at strengthening its AML/CFT architecture. The EU's endorsement now removes an additional layer of friction that has long weighed on the country's international financial dealings.
CBN Governor, Olayemi Cardoso, has consistently argued that recent policy measures--including the deployment of the Electronic Foreign Exchange Market Surveillance System (EFEMS), the shift to a single, market-determined exchange rate regime, and enhanced risk-based banking supervision--represent a decisive break from past practices.
According to Cardoso, these reforms have strengthened Nigeria's ability to absorb external shocks, from volatile oil prices to shifts in global credit 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," he said. "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."
Inside The Compliance Turnaround
Upon assuming office, the Cardoso-led CBN moved swiftly to dismantle structural weaknesses and opacity that had previously placed Nigeria under heightened international scrutiny.
Reforms spanned the entire financial ecosystem--from tighter regulation of Bureau De Change operations to intensified supervision of deposit money banks and other financial institutions. Surveillance tools were upgraded, reporting standards tightened, and enforcement coordination strengthened across agencies.
A key compliance milestone has been Nigeria's improved capacity to identify and verify beneficial ownership. Financial institutions are now required to take reasonable measures to confirm the identity of beneficial owners in all transactions, ensuring transparency around who ultimately controls assets and accounts.
Banks are also mandated to understand customers' ownership and control structures, establish the purpose and intended nature of business relationships, and conduct continuous due diligence throughout the life cycle of those relationships. Transaction monitoring has become more rigorous, significantly reducing blind spots previously exploited for illicit flows.
President of the Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, described Nigeria's removal from the EU list as a landmark development. "This opens new opportunities in Nigerian banks' dealings with international financial institutions," Ogubunka said. "It shows that Nigeria's financial system is safe for payments and other transactions. It is worth celebrating by all Nigerians."
However, he cautioned that sustaining these gains will require discipline and consistency. According to him, authorities must remain vigilant to prevent any relapse that could return Nigeria to enhanced monitoring.
Institutional Coordination at Work
In reacting to Nigeria's earlier removal from the FATF grey list, the CBN had emphasised that the decision recognised "significant improvements in Nigeria's regulatory, supervisory, and enforcement frameworks."
The apex bank described the development as a milestone in strengthening financial system integrity, transparency, and international confidence.
Reforms assessed by FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) included enhanced risk-based supervision, stricter AML/CFT regulations, fit-and-proper assessments, and expanded compliance monitoring across remittance channels, BDCs, and fintech platforms.
Equally critical was improved inter-agency coordination among the CBN, Nigerian Financial Intelligence Unit (NFIU), Economic and Financial Crimes Commission (EFCC), and other law-enforcement bodies, alongside the implementation of governance tools such as the FX Code and EFEMS.
The CBN noted that Nigeria's delisting would lower compliance costs, improve access to international finance, and make cross-border transactions faster and more affordable--benefits expected to translate into smoother trade settlements, quicker remittance inflows, and more predictable access to foreign exchange.
The FATF decision, according to the CBN, reinforces the broader restoration of confidence in Nigeria's economic management. This momentum has been echoed by international credit rating agencies, with Moody's and Fitch upgrading Nigeria's outlook on the back of stronger external balances, improved policy credibility, and tighter monetary discipline.
"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," Cardoso said. "Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust advance together."
The country is also deepening cross-border cooperation. Nigeria's renewed focus on compliance has also shaped its external engagements. In late 2025, the CBN signed a Memorandum of Understanding with the Central Bank of Angola to strengthen regulatory cooperation and combat money laundering.
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The agreement provides a framework for joint supervision of cross-border institutions, information sharing on cybersecurity risks, and collaboration on licensing, resolution planning, foreign exchange management, payment systems, and AML/CFT enforcement.
Both central banks described the partnership as aligned with Africa's broader integration agenda and critical to strengthening regional financial stability.
Counting the Cost--and the Gains
The economic cost of Nigeria's grey-listing was substantial.
Cardoso disclosed that countries under increased monitoring typically suffer a 7.6 per cent decline in capital inflows in the first year--a figure that translated to over $30 billion in lost investment opportunities for Nigeria. "Exiting the list therefore signals a major restoration of confidence and eases compliance frictions for correspondent banks," he said, noting improved access to international finance and smoother cross-border payments.
Signs of renewed confidence are already reflected in macroeconomic forecasts. In its Global Economic Prospects report, the World Bank upgraded Nigeria's growth projection for 2026 to 4.4 per cent, up from its earlier estimate of 3.7 per cent.
The Bank described the outlook as Nigeria's fastest growth pace in over a decade, driven by services expansion, agricultural recovery, modest industrial acceleration, and sustained policy reforms.
The CBN's own 2026 macroeconomic outlook echoes this optimism, projecting growth of 4.49 per cent on the back of structural reforms and a gradually easing monetary policy stance.
Taken together, Nigeria's exit from the EU high-risk list stands as a defining moment--one that links disciplined monetary reform, regulatory credibility, and global trust. The challenge ahead is no longer about reform initiation, but reform endurance.
