FATF status

Nigeria is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

Since February 2023, when Nigeria made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime, Nigeria has taken steps towards improving its AML/CFT regime, including by enhancing international cooperation efforts, improving cooperation mechanisms amongst TF investigative bodies and implementing risk-based monitoring of NPOs at risk of TF abuse. Nigeria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) improving AML/CFT risk-based supervision of FIs and DNFBPs and enhancing implementation of preventive measures for high-risk sectors; (2) ensuring that competent authorities have timely access to accurate and up-to-date beneficial ownership information on legal persons and applying sanctions for breaches of obligations; (3) demonstrating a sustained increase in ML investigations and prosecutions in line with ML risks; (4) proactively detecting violations of currency declaration obligations and applying appropriate sanctions; and (5) demonstrating sustained increase in investigations and prosecutions of different types of TF activities in line with the country’s risk profile.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Nigeria was undertaken in 2023. According to that Evaluation, Nigeria was deemed Compliant for 13 and Largely Compliant for 19 of the FATF 40 Recommendations. It was assessed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption remains a significant barrier to economic growth in Nigeria, with the country ranking 145 out of 180 in Transparency International's 2023 Corruption Perception Index. The Economic and Financial Crimes Commission (EFCC) has made some progress in prosecuting financial crimes, achieving over 9,000 convictions since 2015, but enforcement remains weak due to governance issues and resource constraints. Despite various reforms and the establishment of agencies like the Independent Corrupt Practices and Other Related Offences Commission (ICPC), challenges such as political interference and inadequate funding hinder effective anti-corruption measures.

Nigeria, Africa's second largest economy in 2023, saw a real GDP growth of 2.9% following a 3.3% growth in the previous year, with forecasts suggesting a growth rate of about 3.3% in 2024. However, the country faces significant challenges, including a 28-year high inflation rate of 28.9% driven by rising energy and food prices, and worsening poverty levels, with 46% of the population living in poverty as of 2023.

Nigeria's investment climate is characterized by significant challenges, including high levels of corruption, a protectionist trade regime, and security concerns due to violent crime and terrorism. Despite these obstacles, the Nigerian Investment Promotion Commission (NIPC) allows for 100% foreign ownership in most sectors, and the government has enacted reforms aimed at improving foreign currency inflows and investment opportunities. However, regulatory uncertainty and inadequate infrastructure continue to deter potential investors.