Nigeria and South Africa could be removed from the Financial Action Task Force’s “grey list” as early as next month, in what would mark a major boost for two of Africa’s largest economies, according to sources familiar with the matter.
The FATF, the Paris-based global watchdog on money laundering and terrorist financing, placed both countries under heightened monitoring in February 2023 for shortcomings in tackling illicit financial flows.
Recent on-site inspections assessed their progress, alongside those of Burkina Faso and Mozambique, and sources told Bloomberg the feedback acknowledged significant improvements.
FATF President Elisa de Anda Madrazo has already said South African authorities have met “all or nearly all” of the required actions, according to Business Insider Africa.
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All four countries are expected to be cleared on October 24, the final day of the FATF’s plenary meeting in Paris, though a final decision has yet to be made.
While being placed on the grey list does not impose immediate penalties, it can damage investor confidence and economic reputation.
A 2021 International Monetary Fund report found that grey listing can reduce capital inflows by as much as 7.6% of GDP.
South Africa’s Treasury said it will issue comments only after the FATF makes its decision public next month.
Mozambique has already completed all 26 actions needed to be delisted, according to Luís Abel Cezerilo, who is overseeing the process.
The timing of the decision could align with TotalEnergies SE’s planned restart of its $20 billion natural gas export project in Mozambique.
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Image Credit: Bloomberg
