• Nigeria, South Africa, Mozambique, Burkina Faso removed from grey list

• Decision follows reforms in financial transparency and regulatory oversight

• Move boosts investor confidence, remittances, and cross-border transactions

The Financial Action Task Force (FATF), the global anti-money laundering and counter-terrorist financing watchdog, announced on Friday that it has removed Burkina Faso, Nigeria, South Africa, and Mozambique from its “grey list” of countries under increased monitoring.

The move, taken at the close of the FATF’s plenary meeting in Paris, had been widely expected. The body said the four countries had made “significant progress in implementing structural reforms” to improve financial transparency and compliance.

Burkina Faso, listed since February 2021, strengthened oversight of its banking sector and tightened regulation of non-financial businesses. Nigeria, added in February 2023, modernized its regulatory framework and improved coordination among financial institutions. South Africa enhanced its systems for detecting money laundering and terrorist financing, while Mozambique increased information sharing among agencies and cross-border transaction monitoring.

Positive signal

In South Africa, markets reacted immediately: yields on 10-year sovereign bonds eased slightly, and the rand firmed against the dollar, reflecting renewed investor confidence. In Nigeria, the decision is expected to facilitate diaspora remittances—worth nearly $20 billion a year—and lower transaction costs for local banks.

Economists say the countries’ removal from the list could make them more attractive to foreign investors and ease restrictions on capital flows, as compliance standards become an increasingly important factor in global finance.

The FATF warned, however, that delisting is not permanent. The countries must continue implementing reforms and will remain subject to periodic reviews.

Across Africa, where several nations remain on the grey list, the decision signals progress in financial governance and the fight against illicit capital flows, which UNCTAD estimates at nearly $90 billion annually.

Fiacre E. Kakpo