European Union Removes Nigeria from High-Risk List for Money Laundering and Terrorism Financing Signaling Confidence in Country’s Financial Reforms and Governance

For Nigeria, being removed from the European Union’s list of high-risk countries for money laundering and terrorism financing is more than just a symbolic victory — it’s tangible proof that years of financial reforms are paying off.

This decision reflects a growing confidence in the country’s financial governance and signals to investors, banks, and businesses that Nigeria is serious about transparency and compliance.

A Closer Look at the EU’s Decision

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

This announcement follows Nigeria’s exit from the FATF grey list in October 2025, highlighting a sustained effort to align with international standards.

The EU noted that enhanced due-diligence requirements for transactions involving Nigeria will be lifted from January 29, 2026, pending final approval — a move that will remove a costly barrier to cross-border business.

Two Years of Sweeping Financial Reforms

Much of this progress stems from structural changes led by the Central Bank of Nigeria (CBN).

Over the past two years, the financial system has seen:

• Unified exchange rate policies for greater clarity in the forex market

• Tighter regulation and monitoring of Bureau de Change operators

• Enhanced supervision of deposit money banks

• Deployment of advanced surveillance technologies, including the Electronic Foreign Exchange Market Surveillance System

• Continuous due diligence for identifying beneficial owners of accounts

CBN Governor Olayemi Cardoso has emphasized that these reforms are designed to protect Nigeria from financial shocks, improve transparency, and create a resilient banking system that can withstand global market volatility.

The Ripple Effect on Businesses and Investments

Being on the EU high-risk list previously imposed significant costs.

Analysts estimated that Nigeria lost over $30 billion in investment opportunities during its grey-list period.

Banks faced higher compliance burdens, cross-border payments were slower, and businesses — particularly MSMEs involved in trade — struggled with restricted access to international financial networks.

Now, delisting is expected to ease these burdens.

Investors can move funds with more confidence, correspondent banking ties can strengthen, and transaction costs should decrease.

Uju Ogubunka, President of the Bank Customers Association of Nigeria, described the decision as a “landmark development” for the country’s financial sector, opening new opportunities for Nigerian banks to expand globally.

Strengthening Compliance From the Inside Out

The journey to delisting wasn’t just about rules on paper.

Nigeria undertook a comprehensive compliance overhaul, addressing both structural weaknesses and cultural practices that had drawn international scrutiny.

Financial institutions are now required to:

• Verify the identities of beneficial owners

• Understand the purpose of business relationships

• Continuously monitor transactions for unusual patterns

Additionally, closer coordination between the CBN, the Nigerian Financial Intelligence Unit, and the Economic and Financial Crimes Commission has improved enforcement and regulatory oversight.

These steps have reduced loopholes for illicit financial flows and demonstrated that Nigeria is capable of sustaining a rules-based financial environment.

Boosting Global and Regional Confidence

The EU delisting also strengthens Nigeria’s position within the wider African and global financial systems.

In late 2025, the CBN signed a memorandum of understanding with the Central Bank of Angola to share information, coordinate supervision, and enforce AML/CFT standards.

This collaboration aligns with broader continental efforts to create a more integrated and stable financial ecosystem.

Moreover, international organizations are taking note.

The World Bank recently upgraded Nigeria’s 2026 growth projection to 4.4 per cent, citing the country’s policy reforms, services expansion, agricultural recovery, and steady industrial growth.

For Nigeria, regulatory credibility and monetary discipline are increasingly translating into measurable economic outcomes.

The Road Ahead

While delisting is a major milestone, the work is far from over.

Sustaining reforms will require continuous vigilance, political will, and technological innovation.

The CBN plans to deepen stakeholder engagement, enhance cross-border cooperation, and leverage AI and other digital tools to protect market integrity.

For investors, banks, and businesses, the message is clear: Nigeria is turning a new page, one defined by transparency, accountability, and improved access to the global financial system.

For the country’s economy, the EU’s recognition could mark the start of a period of more predictable growth, lower transaction costs, and increased international confidence.

Summary

Nigeria’s removal from the EU high-risk list is a defining moment, reflecting two years of rigorous reforms and stronger financial governance.

The delisting reduces compliance burdens, restores investor confidence, and positions the country as a credible player in global finance.

The challenge now is to maintain this momentum, ensuring that businesses, banks, and the wider economy reap the full benefits of a more transparent and rules-based financial system.