Nigeria has been removed from the European Union’s list of high-risk jurisdictions for anti-money laundering and counter-terrorism financing, a development that is expected to significantly ease trade, payment systems and investment flows between Africa’s largest economy and European markets.
The European Commission confirmed on Wednesday that Nigeria, along with South Africa, Burkina Faso, Mali, Mozambique and Tanzania, had successfully strengthened its anti-money laundering and counter-terrorism financing regimes and no longer exhibited “strategic deficiencies” under EU assessment standards, according to a report by Business Insider.
The commission noted that the affected countries had implemented comprehensive reforms that brought their financial systems into alignment with international standards established by the Financial Action Task Force, the global money laundering and terrorist financing watchdog based in Paris.
Nigeria’s removal from the EU high-risk list marks the culmination of years of regulatory reforms aimed at addressing weaknesses in the country’s financial oversight mechanisms. The designation had previously subjected Nigerian financial institutions and businesses to enhanced scrutiny in their dealings with European counterparts, creating significant barriers to cross-border commerce.
Dr Doris Uzoka-Anite, Minister of State for Finance, described the development as a major boost to investor confidence in Nigeria’s economy. In a post on the social media platform X on Thursday, she wrote, “Big win for Nigeria! Removed from EU’s financial ‘high-risk’ list! Congrats to President @officialABAT on this achievement. As Minister of State for Finance, I’m proud of this boost to trade and investor confidence.”
The minister’s reference to President Bola Ahmed Tinubu suggests that the federal government views the delisting as a validation of its economic reform agenda, which has included efforts to strengthen financial regulation and improve transparency in government financial operations.
Being designated as a high-risk jurisdiction had imposed substantial practical constraints on Nigerian businesses and financial institutions. Transactions with European partners required enhanced due diligence procedures, stricter documentation requirements, and additional layers of oversight that increased costs and processing times.
Nigerian banks faced heightened scrutiny from their European correspondent banking partners, a situation that frequently slowed cross-border trade finance and complicated investment flows. Some European financial institutions had reportedly become reluctant to maintain banking relationships with Nigerian counterparts due to the compliance burden and reputational risks associated with high-risk jurisdictions.
The removal of these restrictions is expected to reduce transaction costs for Nigerian businesses engaged in international trade, potentially making exports to European markets more competitive. It may also encourage increased foreign direct investment from European sources, as investors will no longer face the additional compliance requirements previously associated with financial transactions involving Nigeria.
The EU’s high-risk list for anti-money laundering purposes was established as part of the bloc’s efforts to combat financial crime and prevent the international financial system from being exploited for money laundering and terrorist financing. Countries are placed on the list based on assessments conducted by the Financial Action Task Force and the EU’s own evaluation processes.
The Financial Action Task Force, established by the Group of Seven industrialised nations in 1989, sets international standards for combating money laundering and terrorist financing. Countries that fail to meet these standards face inclusion on the FATF’s own grey and black lists, which typically triggers corresponding action by regional bodies such as the European Union.
Nigeria had previously appeared on the FATF grey list in February 2023, a designation that indicated the country had committed to resolving identified strategic deficiencies in its anti-money laundering and counter-terrorism financing framework within agreed timeframes. The country’s removal from the EU high-risk list suggests substantial progress in implementing the required reforms.
The reforms implemented by Nigeria likely included strengthening the legal and regulatory framework governing financial institutions, enhancing the capacity of law enforcement and regulatory agencies to detect and investigate financial crimes, and improving international cooperation on money laundering and terrorist financing investigations.
Nigeria’s financial regulators, including the Central Bank of Nigeria and the Nigerian Financial Intelligence Unit, have in recent years introduced various measures aimed at improving transparency and accountability in the financial sector. These have included stricter know-your-customer requirements for bank accounts, enhanced reporting obligations for suspicious transactions, and increased sanctions for non-compliance.
The country has also taken steps to address concerns about the opacity of beneficial ownership information, a key area of focus for international anti-money laundering efforts. The lack of reliable information about the true owners of companies has historically been identified as a significant vulnerability in Nigeria’s financial system.
The simultaneous removal of multiple African countries from the EU high-risk list suggests a broader pattern of improvement in financial governance across the continent. South Africa, as the continent’s second-largest economy, had also faced similar restrictions, while the inclusion of smaller economies such as Burkina Faso, Mali, Mozambique and Tanzania indicates that reform efforts have not been limited to major economic powers.
For Nigeria, the delisting comes at a critical time as the Tinubu administration seeks to attract increased foreign investment and stabilise an economy facing significant fiscal and monetary challenges. The country has been implementing a series of controversial economic reforms, including the removal of fuel subsidies and the floating of the naira, aimed at addressing long-standing structural problems.
The improved international standing resulting from removal from the EU high-risk list could complement these reform efforts by enhancing Nigeria’s reputation among international investors and trade partners. However, sustaining the improvements that led to the delisting will require continued commitment to strengthening financial regulation and enforcement.
The European Union remains one of Nigeria’s largest trading partners, with significant volumes of crude oil exports flowing to European refineries and substantial imports of machinery, vehicles, and manufactured goods coming from EU member states. The reduction in compliance barriers is therefore expected to have tangible economic benefits for businesses on both sides of the relationship.
