Two of Africa’s largest economies are on the brink of a major reputational boost. Both South Africa and Nigeria are advancing towards removal from the Financial Action Task Force (FATF) “grey list”, a designation reserved for jurisdictions under increased monitoring for deficiencies in combating money laundering and terrorist financing.
For global investors, the potential delisting is more than symbolic. It could reshape perceptions of regulatory risk, lower compliance costs, and unlock new flows of capital into Africa’s most systemically important economies.
South Africa: A Near-Certain Exit
South Africa was greylisted in February 2023 after FATF identified shortcomings in its enforcement of anti-money laundering and counter-terrorism financing rules. Since then, Pretoria has embarked on an accelerated reform programme:
- Strengthening beneficial ownership transparency,
- Tightening financial intelligence and supervisory capacity,
- And aligning its legal frameworks with global standards.
By mid-2025, the National Treasury confirmed that South Africa had substantially completed all 22 action items assigned by FATF. In June, FATF authorised an on-site visit to verify sustained progress. If the review is positive, South Africa could be delisted as early as the October 2025 FATF Plenary.
For the country’s financial sector, this matters greatly. Greylisting increased due-diligence requirements for South African entities, raising transaction costs and complicating cross-border capital flows. Removal would send a clear message: the country is serious about governance and transparency, restoring investor confidence at a time when growth is under pressure.
Nigeria: Progress but Not Yet Clear
Nigeria remains on FATF’s “jurisdictions under increased monitoring” list. However, authorities in Abuja have made delisting a top priority for 2025.
Key reforms include:
- Enhanced oversight of financial institutions,
- Stronger enforcement of AML/CFT compliance,
- New legislation to modernise the securities market,
- And measures to track beneficial ownership of companies.
Officials expect FATF to review Nigeria’s progress later this year, with hopes of exiting the grey list before the end of 2025. While the timeline remains uncertain, the trajectory is positive.
Still, investors remain cautious. Nigeria’s greylisting has complicated access to correspondent banking relationships and raised questions about the reliability of its compliance frameworks. Successfully securing delisting would improve the country’s international standing and reduce friction in trade and capital markets.
Why Delisting Matters
Exiting the grey list is not simply a compliance victory. It could deliver tangible benefits to both economies:
- Lower transaction costs: International banks will face fewer compliance hurdles when dealing with South African and Nigerian counterparts.
- Improved access to capital: Pension funds, insurers, and sovereign wealth funds often hesitate to commit capital to greylisted markets.
- Enhanced reputation: For economies competing for FDI, credibility in governance and financial integrity is a valuable asset.
The Broader African Context
Africa’s integration into global capital markets depends heavily on perceptions of regulatory robustness. South Africa and Nigeria — together accounting for over 40% of Sub-Saharan Africa’s GDP — play a critical role in shaping those perceptions.
Their successful exit would not only mark a turning point domestically but also strengthen Africa’s case for greater investor engagement, particularly in sectors like energy transition, digital finance, and infrastructure.
While South Africa appears poised for imminent removal from the grey list, Nigeria’s status will depend on how quickly reforms are embedded and verified by FATF. Either way, 2025 could prove decisive.
For investors, the message is clear: Africa’s two largest economies are making credible progress in aligning with global financial standards. And with that progress comes the possibility of renewed trust, lower barriers, and a fresh chapter in their engagement with international markets.
Source: Further Africa
