How monetary reforms lifted Nigeria off EU high-risk listing

Sweeping monetary sector reforms strengthened transparency, tightened oversight, and rebuilt world confidence, finally serving to Nigeria safe removing from the European Union’s high-risk listing, JUSTICE OKAMGBA studies

The European Union’s resolution to take away Nigeria from its listing of high-risk jurisdictions for cash laundering and terrorism financing has underscored the tangible advantages of reforms carried out by the Central Bank of Nigeria, in accordance with business observers. They famous that the event indicators improved transparency, stronger regulatory compliance throughout the monetary companies sector, and more practical enforcement of Anti-Cash Laundering and Countering the Financing of Terrorism measures. Nigeria’s exit from the EU’s high-risk listing is extensively anticipated to strengthen world confidence and deepen financial partnerships with the nation.

In recent times, Nigeria’s monetary sector has undergone far-reaching adjustments following a sequence of reforms geared toward restoring credibility and stability. These measures embody the unification of the trade price, clearer regulatory steering, improved transparency in overseas trade market operations, and tighter surveillance of economic flows throughout the economic system. Collectively, these initiatives have begun to ship measurable advantages.

Some of the notable outcomes of those efforts is the European Union’s current removing of Nigeria—alongside South Africa and 4 different African international locations—from its listing of high-risk jurisdictions for cash laundering and terrorism financing. Analysts have usually interpreted the choice as a optimistic sign for Nigeria’s financial outlook, offering a further increase to investor sentiment.

An announcement printed on the European Fee’s web site defined the premise for the choice. It stated: “The European Fee, in its evaluation, concluded that Nigeria has considerably strengthened the effectiveness of its AML/CFT regime and satisfactorily addressed the technical and strategic deficiencies highlighted by the FATF.” The assertion added that the transfer displays selections taken by the Monetary Motion Job Drive at its June and October 2025 plenaries, the place a number of international locations had been faraway from the listing of “Jurisdictions underneath Elevated Monitoring,” generally known as the gray listing.

In keeping with the European Fee, the choice additionally implies that enhanced due diligence necessities utilized to transactions involving Nigeria and different delisted international locations will probably be lifted from January 29, 2026, topic to procedural approval by the European Parliament and the Council.

Analysts notice that, very similar to Nigeria’s removing from the FATF gray listing, its exit from the EU high-risk listing carries important financial and monetary implications. Being categorised as a high-risk jurisdiction usually leads to larger transaction prices, delayed funds, constrained correspondent banking relationships, and lowered overseas funding flows.

Nigeria was faraway from the FATF gray listing in October final 12 months after implementing a broad set of reforms designed to strengthen its AML/CFT framework. These reforms have been central to restoring confidence within the nation’s monetary system.

CBN Governor, Olayemi Cardoso, had earlier highlighted a number of initiatives that demonstrated the financial institution’s reform credentials. These embody the deployment of the Digital Overseas Change Market Surveillance System, the transition to a single, market-determined overseas trade price regime, and enhanced risk-based supervision of banks. In keeping with him, these measures have strengthened Nigeria’s potential to soak up exterior shocks, starting from risky oil costs to shifts in world credit score sentiment.

“In 2026, we’ll deepen engagement with stakeholders, strengthen collaboration with different regulators and worldwide companions, and foster accountable innovation throughout the monetary system. We’ll proceed to supply ahead steering, defend the integrity of our monetary markets, leverage know-how and AI to enhance decision-making, and construct institutional capability to help an evolving and resilient monetary system,” Cardoso stated.

Reforms’ contributions

Upon assuming workplace, the CBN management underneath Cardoso moved swiftly to dismantle longstanding bottlenecks and opacity throughout the monetary system that had contributed to Nigeria’s inclusion on the EU listing. From reforms in bureau de change operations—categorised underneath the opposite monetary establishments section—to heightened surveillance and supervision of deposit cash banks, the apex financial institution pursued a complete reform agenda geared toward making certain Nigeria’s exit from the gray listing.

As a part of compliance necessities, Nigerian banks have strengthened their potential to determine useful homeowners and brought affordable steps to confirm their identities, making certain that the true homeowners behind transactions are identified. Monetary establishments are additionally required to know the possession and management buildings of their clients, acquire data on the aim and supposed nature of enterprise relationships, and apply acceptable due diligence measures.

In keeping with regulatory expectations, banks now preserve ongoing scrutiny of transactions all through the length of buyer relationships, reinforcing transparency and accountability throughout the system.

President of the Financial institution Prospects Affiliation of Nigeria, Dr Uju Ogubunka, described Nigeria’s exit from the EU listing as a optimistic improvement for the nation. He recommended the CBN for its function in making certain that Nigeria was now not weighed down by the challenges related to grey-list classification.

In keeping with him, “It opens new approaches and alternatives in Nigerian banks and clients’ dealings with worldwide monetary establishments. It reveals that Nigeria’s monetary system is protected for funds and different transactions. It’s price celebrating by all Nigerians.”

Ogubunka, nevertheless, urged the federal government to maintain the momentum and be sure that Nigeria doesn’t relapse by persevering with to stick strictly to world finest practices.

Stakeholders’ views

Reacting to Nigeria’s removing from the FATF gray listing earlier, the CBN had stated the choice recognised “important enhancements in Nigeria’s regulatory, supervisory, and enforcement frameworks, notably in combating cash laundering, terrorist financing, and proliferation financing.”

The apex financial institution added that the event “marks an essential milestone within the nation’s persevering with efforts to strengthen monetary system integrity, transparency, and worldwide confidence.”

In keeping with the CBN, the FATF and its regional physique, the Inter-Governmental Motion Group Towards Cash Laundering in West Africa, assessed a number of key reforms. These included strengthened oversight of economic establishments by way of up to date AML/CFT laws, risk-based supervision, and fit-and-proper assessments; expanded compliance reporting throughout remittance channels, bureaux de change, and fintech platforms to boost traceability; and improved inter-agency knowledge sharing and enforcement coordination involving the CBN, the Nigerian Monetary Intelligence Unit, the Financial and Monetary Crimes Fee, and different law-enforcement businesses.

The reforms additionally lined the implementation of market governance instruments such because the Overseas Change Code (FX Code) and the Digital Overseas Change Matching System.

The CBN additional said: “Nigeria’s removing from the gray listing will yield tangible advantages for companies and households alike, together with reducing compliance prices, enhancing entry to worldwide finance, and making cross-border transactions sooner and extra reasonably priced.

“In time, these beneficial properties will translate into smoother commerce settlements, faster remittance inflows, and extra predictable entry to overseas trade—enhancing livelihoods, supporting enterprise development, and deepening monetary inclusion.”

The assertion additionally cited worldwide assessments, noting that Moody’s and Fitch had upgraded Nigeria’s rankings outlook, reflecting stronger exterior balances, credible coverage execution, and renewed financial coverage credibility.

Cardoso, talking on the event, stated: “The FATF’s resolution to take away Nigeria from the gray listing is a robust affirmation of our reform trajectory and the rising integrity of our monetary system. It displays a transparent coverage course and the coordinated efforts of key nationwide establishments working collectively to ship sustainable, standards-based reforms.”

He added that the main target going ahead can be on consolidating the beneficial properties to make sure that compliance, innovation, and belief proceed to strengthen monetary stability and Nigeria’s world standing.

Past home reforms, the CBN has additionally strengthened worldwide cooperation. The Memorandum of Understanding (MoU) signed between the CBN and the Financial institution of Angola in late 2025 represents a major step in the direction of enhancing monetary sector regulation and combating cash laundering.

Cardoso, who signed the MoU on behalf of the CBN alongside the Governor of the Central Financial institution of Angola, Manuel Antonio Tiago Diaz, stated the settlement aligns with Africa’s broader targets of financial integration and monetary stability.

Each establishments described the partnership as a milestone in efforts to deepen bilateral cooperation and technical trade.

Underneath the MoU, the 2 central banks are anticipated to determine a bilateral discussion board for the reciprocal trade of technical help, cooperate on cross-border supervision of authorised establishments, share cybersecurity data, and collaborate on licensing, supervision, and determination planning for cross-border monetary entities.

The scope of cooperation additionally extends to trade management, monetary markets, overseas reserves administration, forex operations, cost and settlement programs, financial analysis, banking supervision, and AML/CFT implementation. Each central financial institution leaders expressed optimism that the partnership would ship mutual advantages.

Price of grey-listing

Nigeria’s grey-list standing imposed excessive financial prices, with potential funding losses estimated at over $30bn. Cardoso defined that international locations positioned on the gray listing usually expertise a 7.6 per cent drop in capital inflows within the first 12 months.

“For Nigeria, that interprets to greater than $30bn in potential funding. Exiting the listing, subsequently, indicators a serious restoration of confidence and eases compliance frictions for correspondent banks,” he stated.

In keeping with him, Nigeria’s exit has been welcomed by the worldwide monetary group, enhancing entry to worldwide finance and facilitating smoother cross-border funds. He described the removing from the FATF gray listing as probably the most essential achievements of the 12 months.

“This milestone was the results of a coordinated nationwide effort led by the Federal Authorities, with vital contributions from the Central Bank of Nigeria, the Ministry of Justice, the NFIU, the EFCC, and our regional companions,” Cardoso stated. “By means of stronger supervision, improved reporting requirements, enhanced intelligence-sharing, and governance instruments such because the FX Code, we addressed the deficiencies recognized by FATF throughout its on-site evaluation.”

Financial outlook

Reflecting rising optimism, the World Financial institution, in its International Financial Prospects report, upgraded Nigeria’s financial development forecast for 2026 to 4.4 per cent, from the three.7 per cent projection introduced in June 2025.

The report said: “Development in Nigeria is forecast to strengthen to 4.4 per cent in each 2026 and 2027—the quickest tempo in over a decade. This additional firming of development is anticipated to be underpinned by a continued enlargement in companies and a rebound in agricultural output, with a modest acceleration within the non-oil business.”

It added that ongoing financial reforms, together with tax system enhancements and prudent financial coverage, are anticipated to help exercise, increase investor confidence, and additional cut back inflation. Larger oil output, regardless of decrease world oil costs, can be projected to help fiscal revenues and strengthen the exterior steadiness.

Equally, in its macroeconomic outlook for 2026 launched final month, the CBN projected a optimistic trajectory for the economic system. The apex financial institution said: “The 12 months 2026 presents a sensible window of alternative for macroeconomic stabilisation. The Nigerian economic system is anticipated to proceed increasing, with development projected at 4.49 per cent in 2026. The projection is hinged on continued beneficial properties from broad-based structural reforms and a progressively easing financial coverage stance.”