Nigeria Set to Exit FATF Grey List with New Investments and Securities Act
Nigeria is now optimistic about soon being removed from the Financial Action Task Force (FATF) grey list, a significant milestone that will positively impact its global business standing. This optimism follows the recent signing of the Investments and Securities Act (ISA 2025) by President Bola Tinubu, which introduces comprehensive regulations for digital assets—a key factor in Nigeria’s inclusion on the grey list.
The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, confirmed this development in a statement on Wednesday. The FATF had placed Nigeria on the grey list on February 24, 2023, due to weaknesses in its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. The new legislation, which includes provisions for digital assets, is seen as a crucial step toward addressing these shortcomings.
Dr. Agama emphasized that the inclusion of digital asset regulations within the ISA 2025 gives Nigeria the necessary legal tools to rectify its compliance gaps, ultimately enabling the country to exit the grey list. He stated that the international community is watching closely, and this legislative move signals Nigeria’s readiness to protect businesses and investments operating within its borders.
The SEC’s confidence is rooted in the law’s potential to curb fraudulent activities in the rapidly evolving digital space while fostering trust and innovation in blockchain technologies. Agama also sought to reassure both local and international stakeholders, stressing that the regulations would protect the national interest and encourage responsible participation in digital assets.
Agama explained that the regulation of cryptocurrencies and digital assets would not result in a weakening of the Naira. Instead, the SEC is focused on ensuring that businesses within this sector adhere to national and international standards. He further noted that the SEC would offer guidance to entities operating in the space, ensuring compliance with legal requirements to protect the national economy and prevent illegal activities.
The SEC is also working with other key institutions, such as the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC), the Nigeria Financial Intelligence Unit (NFIU), and the Office of the National Security Adviser (ONSA), to establish a robust regulatory framework for digital assets. This collaborative effort aims to ensure that the operations within this space do not pose risks to the country’s stability.
As part of the regulatory framework, the SEC is rolling out two initiatives: the Regulatory Incubation Programme and the Accelerated Incubation Programme. These initiatives are designed to assess the risks posed by institutions in the digital asset space to Nigeria’s economy. Agama revealed that these programs are nearing completion, with the next cohort set to be released in the coming quarter.
The SEC is also introducing risk management tools as part of the regulation process, which will help mitigate potential future risks. The aim is to enhance investor protection by identifying and managing risks associated with capital market operators and securities issuances. Agama highlighted that, with the strengthened regulations, investors would feel more confident in participating in Nigeria’s financial markets, knowing that their interests are protected.
In addition to the new regulations, the SEC is implementing Know Your Customer (KYC) measures to further protect investors. These measures will help distinguish between genuine investors and those who may have ill intentions for the market, further boosting investor confidence and protection.
