Africa’s FATF Exits: Inside the New Regulatory Transformation

Africa is entering a new phase of regulatory transformation, and one of the clearest indicators of this shift is the recent removal of South Africa and Nigeria from the FATF grey list. Both exits were confirmed during the October 24, 2025 FATF Plenary, marking a turning point for two of the continent’s most influential economies.

Being placed on FATF’s grey list is far more than a reputational setback. It impacts cross-border financial flows, correspondent banking relationships, investment decisions, and the perceived integrity of a nation’s financial system. Exiting the grey list, therefore, requires more than legislative amendments—it demands structural, institutional, and operational reforms that demonstrate real effectiveness.

This article examines how South Africa and Nigeria achieved their removal from the grey list, what reforms FATF recognised as sufficient progress, and what these developments mean for risk and compliance leaders across Africa.

Why FATF grey-listing matters

The FATF grey list identifies jurisdictions under “increased monitoring,” where strategic deficiencies exist in anti–money laundering and counter–terrorist financing (AML/CFT) frameworks. While the listed country commits to working with FATF to resolve these weaknesses, the consequences are immediate:

• International banks may de-risk or restrict relationships,
• Investors may reassess country risk,
• Multilateral institutions may tighten due diligence, and
• Domestic institutions face heightened scrutiny from foreign partners.

For these reasons, exiting the grey list signals a restoration of confidence and a strengthened commitment to global financial integrity standards.

South Africa: A whole-system transformation that convinced FATF

South Africa’s exit from the grey list on 24 October 2025 reflects one of the most comprehensive AML/CFT reform efforts in the region. When FATF grey-listed the country in 2023, it cited deficiencies in beneficial ownership transparency, enforcement capabilities, and supervision of high-risk sectors.

In response, the South African government undertook a sweeping regulatory overhaul. Key financial crime laws—including the Companies Act and the Financial Intelligence Centre Act—were amended to address transparency gaps and expand the authority of supervisors. The Financial Intelligence Centre (FIC) increased its supervisory inspections and broadened its guidance to reporting institutions, pushing them toward more structured and risk-based compliance practices.

One of the strongest components of South Africa’s remediation was the creation and strengthening of beneficial ownership information systems, ensuring that regulators, investigators, and financial institutions could more easily trace ownership structures—one of FATF’s highest priorities globally.

FATF’s official statement confirms that South Africa successfully completed its Action Plan and demonstrated tangible improvements in operational effectiveness, particularly in investigations, inter-agency cooperation, and risk-based supervision. This progress provided FATF with sufficient confidence to remove South Africa from increased monitoring.

The National Treasury’s accompanying statement also reinforced that the country intends not only to maintain these improvements but to continue strengthening national AML/CFT resilience.

Nigeria: Demonstrating effectiveness in supervision and intelligence quality

Nigeria was removed from the FATF grey list on the same date—24 October 2025—after completing the reforms set out in its FATF Action Plan. FATF’s concerns had focused on the effectiveness of Nigeria’s risk-based supervision, the consistency of suspicious transaction reporting, and the availability and accuracy of beneficial ownership information.

To address these deficiencies, Nigeria strengthened the operational capacity of the Nigerian Financial Intelligence Unit (NFIU) and enhanced coordination between supervisors such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and law enforcement agencies.

Nigeria also reinforced its suspicious transaction reporting regime. Financial institutions and fintechs adopted clearer documentation practices, improved escalation pathways and demonstrated more timely and relevant reporting—an area FATF monitors closely because it reflects real-world AML/CFT compliance, not just technical adherence.

Cross-border cooperation also improved significantly, particularly through Nigeria’s engagement with GIABA, the FATF-style regional body for West Africa.

The FATF statement emphasised that Nigeria’s reforms were not limited to regulatory updates but showed credible operational outcomes, allowing Nigeria to exit the grey list alongside South Africa.

What the grey list exists mean for regulation and for African institutions

A critical misconception is that exiting the grey list results in less regulatory pressure. In reality, it ushers in a period of more intensive supervision. FATF expects jurisdictions to sustain their reforms, and domestic regulators must demonstrate that improvements are permanent.

For financial institutions, this means several changes:

1. Evidence-based AML/CFT becomes a non-negotiable standard

Supervisors now expect traceability: how risks are assessed, how decisions are made, how escalations occur, and how controls function in practice.

2. Beneficial ownership verification is now a permanent regulatory priority

FATF’s focus on beneficial ownership is global, and both South Africa and Nigeria were evaluated heavily on this point. Institutions should expect regulators to demand stronger verification processes and clearer audit trails.

3. Real-time monitoring and data consistency matter more than ever

Disjointed spreadsheets, inconsistent reporting, and siloed documentation no longer meet supervisory expectations. Data centralisation and automation—whether through specialised tools or structured workflows—will be essential.

4. Supervision will intensify for fintechs, digital lenders, and mobile money providers

These sectors present growing AML/CFT risks. Regulators are expected to expand their scrutiny of onboarding practices, transaction monitoring, and governance of new digital financial services.

5. Governance and board accountability are taking centre stage

Boards will be expected to demonstrate stronger oversight of AML/CFT risks, challenge weak controls, and ensure adequate resource allocation.

What this means for Africa’s AML/CFT future

The removal of South Africa and Nigeria from the FATF grey list marks a pivotal moment for the continent. It demonstrates that African countries can undertake meaningful reforms, strengthen institutional coordination, and align with global standards in ways that build long-term resilience.

It also signals to the rest of the region that AML/CFT expectations will continue to rise. Regulators across Africa are increasingly adopting risk-based approaches, enhancing beneficial ownership frameworks, and strengthening supervision of digital financial ecosystems.

For risk leaders, this is both a challenge and an opportunity: a chance to modernise compliance practices, reinforce governance structures and build AML/CFT systems that are resilient, intelligent and ready for the next decade of regulatory evolution.

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