Risk Indicators
- FATF/EU Blacklist/Greylist (Lower Concern)
- Terrorism Financing (Higher Concern)
- US Dept of State INCSR
- Proliferation Financing
- Corruption
- Criminality
- Resilience & Governance
- Financial Transparency
- Offshore Finance Centres
- Sanctions
Background
Nigeria’s history reflects the interaction of diverse pre-colonial kingdoms, centralized empires, and decentralized communities, followed by British amalgamation in 1914 and independence in 1960. Regional and ethnic tensions shaped the early republic, culminating in the Biafran War and decades of military influence before the establishment of durable civilian rule in 1999. Since then, landmark transfers of power—including the All Progressives Congress victory in 2015—have accompanied continuing efforts to strengthen democracy and reform a petroleum-dependent economy.
As Africa’s most populous nation, Nigeria faces overlapping pressures from corruption, resource competition, criminal banditry, separatist violence, and insurgencies associated with Boko Haram and ISWAP. Its security environment is closely linked to neighboring states through porous borders, the Multinational Joint Task Force, and the expansion of groups such as IS Sahel and JNIM toward coastal West Africa. Relations with Niger have been especially consequential following the 2023 coup and ECOWAS sanctions, whose effects on electricity, trade, border communities, and regional cooperation reveal the wider stakes.
AML & Terrorist Financing
Nigeria has made notable AML/CFT progress, including removal from the FATF list, updated risk assessments and strategies, and improved beneficial-ownership access, yet it remains in enhanced follow-up with effectiveness concerns. Significant risks persist around corruption, fraud, cybercrime, cash-based activity, informal foreign-exchange operations, virtual assets, unlicensed businesses, and laundering through domestic and international channels. The NFIU, EFCC, CBN, SCUML, DSS and CAC are central to the response, but challenges involving financial-intelligence use, stand-alone money-laundering and terrorist-financing prosecutions, targeted sanctions, asset confiscation, supervision and cross-border cooperation continue to merit close attention.
Sanctions
Nigeria is not currently subject to international sanctions, but Nigerian individuals and companies have been designated under thematic measures, including U.S. counter-terrorism actions involving Boko Haram and ISWAP and a July 2026 non-proliferation designation concerning an Abuja-registered intermediary. As a UN member and ECOWAS leader, Nigeria implements applicable Security Council measures and previously enforced regional restrictions against Niger following the 2023 coup, which were lifted in February 2024. At the same time, concerns involving Azman Air, Mahan Air, Gulf of Guinea shipping, DPRK-linked procurement, bureaux de change, diplomatic accounts, and free-trade zones point to Nigeria’s infrastructure being used to evade restrictions affecting Iran, North Korea, and Russia.
Criminality
Corruption remains a serious obstacle to economic activity and poverty reduction in Nigeria, with bribery reported in customs, ports, and public services, while smuggling, procurement irregularities, oil theft, and financial crime continue to expose weaknesses in governance. The EFCC and ICPC have pursued investigations, convictions, and asset recoveries, but findings from bodies such as NEITI, the Auditor General, and TUGAR point to persistent noncompliance, limited enforcement powers, under-resourcing, and possible political interference.
Reports
Nigeria’s counternarcotics response expanded through the NDLEA’s intelligence, surveillance, forensic, rehabilitation, and prevention initiatives, even as trafficking routes, domestic drug use, corruption, and substantial seizures of cannabis, cocaine, methamphetamine, opioids, and other substances remained pressing concerns. The country also recorded increased trafficking prosecutions and victim referrals while continuing to face serious protection gaps involving IDPs, children, forced labor, “baby factories,” and Boko Haram-linked exploitation, alongside persistent violence from ISIS-WA, BH, Ansaru, bandit groups, and other armed actors.
Industry/Product Sector Risk
Nigeria’s financial and commercial landscape presents varied exposure to money laundering and terrorist financing, with particularly pronounced vulnerabilities in banking, foreign exchange, real estate, casinos, trade finance, wealth management, and cash-intensive activities. While entities overseen by the CBN and DNFBPs registered with SCUML form part of the formal framework, gaps involving unlicensed operators, beneficial ownership, non-face-to-face services, and professional gatekeepers remain significant. Illicit value may move through corruption, fraud, oil-related offences, smuggling, cybercrime, and terrorist financing channels spanning both sophisticated cross-border structures and largely informal sectors such as mining, hospitality, transport, agriculture, and retail.
Economy & Investment Climate
Nigeria’s economy is showing early signs of stabilization after far-reaching reforms, with stronger real GDP growth, improved foreign-exchange reserves, rising capital-market activity, and renewed international investor interest, even as high inflation, currency pressures, and elevated borrowing costs continue to weigh on households and businesses. The Central Bank of Nigeria, NIPC, NNPCL, and other institutions are pursuing measures to strengthen investment, trade, energy, and financial systems, but infrastructure gaps, regulatory uncertainty, corruption, insecurity, and uneven implementation remain important features of the business environment.
Cryptocurrency Regulations
Nigeria permits cryptocurrency activity without recognizing it as legal tender, placing exchanges and Virtual Asset Service Providers under evolving oversight from the CBN and SEC, including licensing, substantial capital, KYC, and AML requirements. Tax treatment, digital-asset offerings, and enforcement are likewise receiving increasing attention from bodies such as FIRS, NFIU, and EFCC, with details around approved platforms, disclosure obligations, and proposed penalties revealing a closely watched market.
Get full access
The information on this page is a brief summary. Get access to EDD country reports, all risk category scores and customisable weightings for 245 jurisdictions.