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 win. For many industry watchers, it represents concrete validation of wide-ranging financial-sector reforms led by the Central Bank of Nigeria (CBN) and a signal that years of weak oversight, opaque foreign exchange practices and compliance lapses are giving way to a more transparent, rules-based system.
The EU’s decision is widely seen as an endorsement of the growing effectiveness of Nigeria’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework and a reflection of rising confidence in the country’s financial governance. For Africa’s largest economy, the implications extend beyond regulatory recognition, with potential effects on foreign investment inflows, correspondent banking relationships, cross-border payments and Nigeria’s standing within 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, stronger regulatory guidance, improved transparency in foreign exchange market operations and enhanced monitoring of financial flows across the economy. While many of these reforms were politically difficult and operationally complex, they have begun to deliver measurable outcomes.
One of the most significant gains is the EU’s decision to delist Nigeria, alongside South Africa and four other African countries, from its register of high-risk jurisdictions. Market analysts interpret the move as a boost to Nigeria’s economic prospects 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” previously identified by the Financial Action Task Force (FATF). The Commission said the decision reflects resolutions reached at the FATF’s June and October 2025 plenaries, which removed Nigeria from the list of jurisdictions under increased monitoring, commonly known as the grey list.
The EU further 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. For businesses, banks and investors, this effectively removes an additional layer of friction that has long increased transaction costs and delayed cross-border dealings.
Nigeria exited the FATF grey list in October last year after implementing reforms to strengthen its AML/CFT architecture. The EU’s endorsement amplifies the economic impact of that decision. High-risk classification typically results in higher compliance costs, restricted correspondent banking ties, delayed international payments and reduced appetite for foreign investment, all of which have weighed on Nigerian businesses, including MSMEs engaged in trade and cross-border transactions.
CBN Governor Olayemi Cardoso has repeatedly argued that recent policy measures mark a decisive break from past practices. These include the deployment of the Electronic Foreign Exchange Market Surveillance System, the move to a single market-determined exchange rate regime and enhanced risk-based supervision across the banking sector. According to Cardoso, the reforms have strengthened Nigeria’s capacity to absorb external shocks, from volatile oil prices to shifts in global credit conditions.
He said the CBN plans to deepen engagement with stakeholders in 2026, strengthen collaboration with domestic and international regulators and foster responsible innovation across the financial system, while leveraging technology and artificial intelligence to improve decision-making and protect market integrity.
Behind the delisting lies a broad compliance overhaul. Upon assuming office, the Cardoso-led CBN moved quickly to address structural weaknesses and opacity that had previously placed Nigeria under heightened international scrutiny. Reforms cut across the financial ecosystem, including tighter regulation of Bureau De Change operators, intensified supervision of deposit money banks, upgraded surveillance tools, stricter reporting standards and stronger enforcement coordination among agencies.
A major compliance milestone has been improved capacity to identify and verify beneficial ownership. Financial institutions are now required to take reasonable measures to confirm the identities of beneficial owners in transactions, improving transparency around who ultimately controls assets and accounts. Banks are also mandated to understand customer ownership structures, establish the purpose of business relationships and conduct continuous due diligence, significantly reducing loopholes for illicit financial flows.
President of the Bank Customers Association of Nigeria, Uju Ogubunka, described the EU delisting as a landmark development that opens new opportunities for Nigerian banks in their dealings with international financial institutions. He noted that the decision signals improved safety and credibility in Nigeria’s payment and transaction systems, while cautioning that authorities must sustain discipline to avoid a relapse into enhanced monitoring.
The CBN has attributed Nigeria’s progress to stronger institutional coordination among regulators and law-enforcement agencies, including the Nigerian Financial Intelligence Unit and the Economic and Financial Crimes Commission. Reforms assessed by FATF and the Inter-Governmental Action Group Against Money Laundering in West Africa included enhanced risk-based supervision, stricter AML/CFT rules, fit-and-proper assessments and expanded compliance monitoring across remittance channels, BDCs and fintech platforms.
According to the apex bank, delisting is expected to lower compliance costs, improve access to international finance and make cross-border transactions faster and more affordable. These gains are likely to translate into smoother trade settlements, quicker remittance inflows and more predictable access to foreign exchange for businesses.
The economic cost of grey-listing was significant. Cardoso disclosed that countries under increased monitoring typically experience a 7.6 per cent decline in capital inflows in the first year, a figure that translated into more than $30 billion in lost investment opportunities for Nigeria. Exiting the list, he said, signals a restoration of confidence and eases compliance frictions for correspondent banks.
Signs of renewed confidence are already emerging. The World Bank recently upgraded Nigeria’s 2026 growth projection to 4.4 per cent, citing services expansion, agricultural recovery, modest industrial growth and sustained policy reforms. The CBN’s own outlook projects similar growth momentum, supported by structural reforms and a gradually easing monetary policy stance.
Nigeria is also deepening cross-border regulatory cooperation. In late 2025, the CBN signed a memorandum of understanding with the Central Bank of Angola to strengthen collaboration on supervision, information sharing and AML/CFT enforcement. Both institutions described the partnership as aligned with Africa’s broader integration agenda and critical to regional financial stability.
Taken together, Nigeria’s removal from the EU high-risk list marks a defining moment that links monetary discipline, regulatory credibility and global trust. The task ahead is no longer about initiating reforms, but sustaining them long enough for businesses, investors and the wider economy to fully reap the benefits.