European Union Removes Nigeria from High-Risk List as Central Bank Reforms Strengthen Anti-Money Laundering Measures Across the Country

Nigeria’s recent removal from the European Union’s list of high-risk countries for money laundering and terrorism financing is more than a bureaucratic milestone — it’s a tangible recognition of years of deep financial reform.

For many in the banking and investment sectors, it’s proof that Nigeria is moving away from opaque practices, inconsistent oversight, and compliance gaps toward a more transparent, rules-based financial system.

Analysts say the decision reflects growing confidence in Nigeria’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework and positions Africa’s largest economy to attract more foreign investment, strengthen cross-border banking ties, and enhance its credibility in the global financial system.

Overhauling the Financial Sector

Over the past two years, Nigeria has undertaken sweeping reforms in its financial sector.

Central Bank of Nigeria (CBN) initiatives have included unifying the exchange rate, tightening regulatory guidance, improving transparency in foreign exchange operations, and expanding monitoring of financial flows nationwide.

These changes were politically and operationally challenging, but they are now producing measurable results.

One of the clearest signs is the EU’s decision to delist Nigeria, alongside South Africa and four other African countries, from the list of high-risk jurisdictions.

Market watchers interpret this as a positive signal to investors sensitive to governance, transparency, and compliance standards.

EU Endorsement and Its Impact

The European Commission confirmed that Nigeria “significantly strengthened the effectiveness of its AML/CFT regime and satisfactorily addressed the technical and strategic deficiencies” previously highlighted by the Financial Action Task Force (FATF).

Enhanced due-diligence requirements applied to transactions involving Nigeria will be lifted from January 29, 2026, following procedural approval by the European Parliament and Council.

For businesses, banks, and investors, this effectively removes costly barriers that have long delayed cross-border transactions.

Nigeria had already exited the FATF grey list in October 2025 after implementing reforms to strengthen its financial oversight.

The EU’s endorsement amplifies the impact, reducing compliance costs, easing correspondent banking ties, and boosting investor confidence across sectors, from trade to MSMEs.

Key Reforms Under CBN Leadership

CBN Governor Olayemi Cardoso has emphasized that these reforms mark a decisive break from past practices. Key measures include:

• Deployment of the Electronic Foreign Exchange Market Surveillance System

• Transition to a single, market-determined exchange rate

  Suggested Readings (News continues below)

  

  Michelle Yates and the Grafton School face civil lawsuit after allegedly dragging and abusing a 13-year-old boy at their Berryville, Virginia facility

  

  Sarah Ferguson Faces Renewed Scrutiny as Newly Released Epstein Files Reveal Emails About Princess Eugenie and Personal Debts in the United Kingdom

  

  Michelin Guide holds its first-ever ceremony in Dublin but does not award any new three-star ratings to restaurants across Ireland and Great Britain

  

  Reform UK leader Nigel Farage outlines plan to scrap homeworking culture and improve productivity across Britain during rally

• Risk-based supervision of banks and financial institutions

Cardoso says these initiatives have bolstered Nigeria’s ability to absorb external shocks, including fluctuations in oil prices and global credit conditions.

The CBN is also exploring technology and AI solutions to strengthen decision-making, improve market integrity, and foster responsible innovation.

Compliance Overhaul Behind the Scenes

The delisting reflects extensive work to strengthen compliance and transparency.

Structural reforms under Cardoso’s tenure have:

• Tightened oversight of Bureau De Change operators

• Intensified supervision of deposit money banks

• Upgraded surveillance and reporting tools

• Improved coordination between regulators and enforcement agencies

A major milestone has been enhanced transparency around beneficial ownership.

Financial institutions are now required to verify the identities of ultimate owners in transactions, understand customer structures, and conduct continuous due diligence — significantly reducing opportunities for illicit financial flows.

Business Community Reacts

Uju Ogubunka, President of the Bank Customers Association of Nigeria, described the EU delisting as a landmark development.

He noted that it improves credibility in international dealings while cautioning that continued discipline is necessary to prevent regression.

The CBN credits progress to stronger collaboration between agencies, including the Nigerian Financial Intelligence Unit and the Economic and Financial Crimes Commission.

FATF and regional bodies have commended Nigeria’s enhanced supervision, expanded compliance monitoring, and enforcement across remittance channels, fintech platforms, and Bureau De Change operators.

Economic Gains and Outlook

Exiting the high-risk list is expected to lower compliance costs, speed up cross-border transactions, and expand access to international finance.

These improvements could translate into smoother trade settlements, faster remittance inflows, and more predictable foreign exchange availability for businesses.

Previously, being on the grey list cost Nigeria roughly $30 billion in potential investment and reduced capital inflows by about 7.6% in the first year.

The delisting now signals renewed confidence and restores frictionless access to correspondent banking networks.

The World Bank has already upgraded Nigeria’s 2026 growth projection to 4.4%, citing a rebound in services, agriculture, and moderate industrial expansion.

The CBN forecasts similar momentum, supported by structural reforms and easing monetary policy.

Strengthening Regional Cooperation

Nigeria is also building stronger cross-border regulatory ties.

In late 2025, the CBN signed a memorandum of understanding with the Central Bank of Angola to improve supervision, information sharing, and AML/CFT enforcement.

Both nations see the collaboration as vital for financial stability and regional integration across Africa.

Sustaining Momentum

Nigeria’s removal from the EU high-risk list is a defining moment linking monetary discipline, regulatory credibility, and global trust.

The focus now shifts from implementing reforms to sustaining them, ensuring that businesses, investors, and the broader economy fully benefit from a more transparent, efficient, and compliant financial system.