Nigeria and South Africa are on track to be removed from the Financial Action Task Force (FATF) grey list by October, a move expected to boost investor confidence in both economies.
The FATF, a Paris-based body that monitors compliance with global standards against money laundering and terrorist financing, placed both countries on its grey list in February 2023 after identifying weaknesses in their systems.
Recent on-site inspections in Nigeria, South Africa, Burkina Faso, and Mozambique found that the countries had made significant progress in addressing deficiencies.
The findings have opened the way for their possible delisting during FATF’s plenary session scheduled for October 24 in Paris.
The decision, however, will depend on consensus among FATF’s 39 member jurisdictions, including major economies such as the United States, United Kingdom, China, Japan, India, and the European Commission.
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Analysts believe Nigeria and South Africa’s removal from the list would send a positive signal to global investors.
“It would be confirmation that the reforms and measures put in place in the wake of the grey listing are both significant and sticky,” said Lauren van Biljon, Senior Portfolio Manager at Allspring Global Investments UK Ltd.
If endorsed, the development would mark a turning point for the two largest economies in Africa, which have faced increased scrutiny over illicit financial flows and compliance standards.
Burkina Faso and Mozambique, also inspected recently, may join Nigeria and South Africa in exiting the list during the October plenary.
