Sopuruchi Onwuka

Government is working to be removed from a global financial watchdog’s “gray list” of countries under heightened scrutiny after the Financial Action Task Force in February listed Nigeria in the back book for failing to tackle money laundering.

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Oracle Intelligence reports that the blacklisting was imposed on the country February 2023 as many agencies of the government and politicians were accused of hauling huge cash across financial wires in Europe at a time the ruling All Progressive Congress (APC) battled to stem the wind of change in the political space.

It also coincided with Nigeria’s slide-back into international debts as the outgoing government of late President Muhammadu Buhari embarked on mindless international borrowing spree.

The watchdog’s recommendations are closely tracked by global investors who’re wary of conducting business in places found to be deficient in anti-money laundering regulations. Jurisdictions added to the list require closer monitoring, and the designation may cast serious doubt over the integrity of their financial systems.

A 2021 report by the International Monetary Fund found gray-listed countries experienced “a large and statistically significant reduction in capital inflows.”

With the government of President Bola Tinubu battling to stem the tide of economic retrogression wreaked on the country by drastic recovery measures, wooing international investments to spur activities in the critical sectors of the economy has made it urgent for the nation to be delisted from the corruption dashboard.

Oracle Intelligence gathered that Nigeria along with other African countries including South Africa, Burkina Faso and Mozambique, could be removed from the gray list after FATF assessors noted significant progress.

In implementing policies aimed at improving financial transparency to attract investment, Nigeria published guidance on how the private sector should work with government agencies to tackle financial crimes.

According to the reports seen by Oracle Intelligence, assessors from the FATF conducted on-site visits on some African economies and noted significant progress in the action plans for South Africa, Nigeria, Burkina Faso, and Mozambique.

The removal from the list would be “a culmination of the remarkable work the government is doing” and would make the countries “more attractive to investors,” said government spokesmen for Nigeria and officials for other countries.

If things move as smooth as expected, Nigeria will be delisted from the corruption warning book this month, according to reports citing developments in the Financial Action Task Force which is expected to end its plenary in Paris, France, on October 24. However, removing Nigeria from the list would require a collective agreement from all members of the task force including the US, UK, European Commission, China, Japan and India.

It is expected that Nigeria’s exit from the list would be good for market sentiment towards government’s efforts at fulfilling global obligations and making Nigeria more attractive to investors.

Under the presidency of Mexican official Elisa de Anda Madrazo, the FATF has revamped its gray-listing criteria. It has placed a greater emphasis on scrutinizing the body’s wealthiest members, while putting less of a focus on jurisdictions classified as least-developed countries, which typically pose a lower systemic risk.

Apart from setting standards on countering money laundering and terrorist financing, the group also conducts research to inform best practices on emerging issues, from virtual assets to sextortion.