Nigeria Country Summary

FATF Status

Nigeria is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

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 2024. According to that Evaluation, Nigeria was deemed Compliant for 13 and Largely Compliant for 23 of the FATF 40 Recommendations. It was assessed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Crime and corruption remain significant challenges in Nigeria, severely impacting economic growth and public trust in governance. Despite the establishment of agencies like the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to combat these issues, enforcement remains weak due to underfunding, lack of independence, and systemic dysfunction within governmental bodies.

The country grapples with various forms of organized crime, including human trafficking, arms trafficking, and cybercrime, often facilitated by corrupt practices and inadequate law enforcement. While Nigeria has made some strides in implementing anti-corruption measures and improving transparency, the pervasive nature of corruption and the challenges faced by law enforcement agencies hinder significant progress in creating a resilient response to crime.

Nigeria's economy faced substantial challenges in 2024, resulting in a drop from Africa's second to fourth largest economy by GDP, largely due to government reforms such as foreign exchange liberalization and the removal of fuel subsidies. Despite these reforms being deemed necessary for long-term growth, they led to significant currency volatility and inflation, with the naira losing over 40% of its value and inflation peaking at 34.8% in December 2024. However, the economy showed signs of recovery with a real GDP growth of 3.84% and a stabilization of the naira's exchange rate, alongside a successful Eurobond issuance that attracted significant international investor interest, indicating a potential restoration of confidence in Nigeria's investment climate.

The investment landscape in Nigeria remains complex, characterized by high levels of corruption, regulatory uncertainty, and a protectionist trade regime that complicates foreign direct investment. While the Nigerian Investment Promotion Commission facilitates foreign ownership in most sectors, challenges such as high tariffs, bureaucratic inefficiencies, and a lack of transparency hinder business operations. Additionally, the ongoing security concerns, particularly from insurgent groups and violent crime, further complicate the investment environment, making it imperative for potential investors to navigate these risks carefully while seeking opportunities in Nigeria's burgeoning sectors, particularly in technology and agriculture.