Nigeria and South Africa could be removed from the Financial Action Task Force’s (FATF) grey list as early as next month, according to a Bloomberg report citing sources familiar with the matter.
The Paris-based watchdog, which combats money laundering and terrorism financing, placed both countries under increased monitoring in February 2023 due to shortcomings in tackling illicit financial flows. FATF assessors who visited in recent weeks are said to have reported significant progress, paving the way for removal.
“A final decision is expected on October 24 at the FATF plenary in Paris,” the report stated, adding that Burkina Faso and Mozambique are also under consideration for removal pending confirmation from FATF’s 40 member countries.
Lauren van Biljon, senior portfolio manager at Allspring Global Investments, said exiting the grey list would signal that reforms introduced since last year are working. While she noted the market impact could be modest, she suggested it might provide a short-term lift to asset prices.
Countries on FATF’s grey list face tighter scrutiny of their financial systems and greater difficulty attracting foreign investment. Nigeria has been working to address deficiencies, with the Nigerian Financial Intelligence Unit (NFIU) announcing in June that FATF had approved an on-site assessment following progress against money laundering and terror financing.
In July, the federal government said over 730 individuals had been convicted of terrorism-related offences, highlighting what it described as strengthened enforcement measures. The October decision in Paris will determine whether Nigeria and South Africa can shed the extra monitoring and boost investor confidence in their financial systems.
