Nigeria and South Africa have been removed from the Financial Action Task Force’s (FATF) grey list, marking a win for two of Africa’s biggest economies and potentially unlocking new remittance flows and foreign investment.
Bloomberg reported on Friday that the Paris-based watchdog said both countries, alongside Mozambique and Burkina Faso, are no longer subject to “increased monitoring” for deficiencies in combating money laundering and terrorist financing.
South Africa and Nigeria were added to the grey list in February 2023, a move that rattled investor confidence and raised compliance costs for cross-border transactions. Mozambique was listed in 2022, and Burkina Faso in 2021. The FATF had urged them to strengthen their anti-money-laundering regimes and improve transparency in their financial systems.
For Nigeria, the impact is expected to be immediate. The country receives around $20 billion in annual remittance inflows, and the FATF move could make it cheaper and easier for Nigerians abroad to send money home.
Finance Minister Wale Edun welcomed the news, calling it a signal to investors and global partners that Nigeria’s institutions are “strong, transparent and internationally trusted.”
“It will ease cross-border transactions, improve capital flows, including foreign direct investment,” he told Bloomberg.
“A major milestone in Nigeria’s journey towards economic reform, institutional integrity and global credibility,” President Bola Tinubu added in a statement.
South Africa’s exit would help boost market optimism and signal progress on government reforms. These exits signal a turning point for Africa’s fintech and digital payments sectors, which bore the brunt of heightened scrutiny under grey-listing. With compliance risk now lower, fintechs, banks, and cross-border payment providers can access international banking rails more easily, potentially cutting transaction costs and unlocking new capital inflows.
Compliance pays off
For fintechs, the decision vindicates months of regulatory reforms. The Central Bank of Nigeria (CBN) has tightened Know-Your-Customer (KYC) checks and licencing audits since 2023, while South Africa passed sweeping anti-money-laundering amendments to align with FATF standards. These moves have restored some international confidence after years of de-risking by foreign banks that made it harder for local startups to access global payment partners.
However, this opportunity also raises the bar for compliance: fintechs and the larger financial landscape will now be held to world-class anti-money-laundering (AML) standards to keep investor trust.
The FATF, which is currently chaired by Mexican official Elisa de Anda Madrazo, has recently updated its grey-listing criteria, placing more emphasis on holding wealthier members accountable and reducing the compliance burden on less-developed economies.
South Africa is scheduled for its next full evaluation in April 2027, when FATF will apply its new methodology for assessing financial transparency and anti-money-laundering compliance.