Nigeria and South Africa set to exit dirty-money list in October

Nigeria and South Africa could be removed from the Financial Action Task Force’s “grey list” as early as next month, a potential boost for two of Africa’s largest economies, according to sources familiar with the matter.

The FATF, a 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.

Assessors conducted on-site inspections in recent weeks, and feedback on their action plans, as well as those of Burkina Faso and Mozambique, noted significant progress, sources told Bloomberg.

Business Insider Africa earlier reported that the FATF has already determined South African authorities have met “all or nearly all” of the required actions, according to FATF President Elisa de Anda Madrazo.

All four nations are expected to be cleared on Oct. 24, the final day of the FATF’s plenary meeting in Paris, though no final decision has been taken.

Potential market boost if listing is lifted

Although being placed on the grey list does not carry immediate penalties, it can severely damage a country’s economy and reputation.

A 2021 International Monetary Fund (IMF) report found that grey listing can cut capital inflows by as much as 7.6% of a country’s GDP.

South Africa’s Treasury said it will comment after the FATF’s decision is made public next month. Mozambique has completed all 26 actions needed to be delisted, said Luís Abel Cezerilo, who is coordinating the country’s removal.

That decision would come just as TotalEnergies SE prepares to restart its $20 billion natural gas export project.

By Adekunle Agbetiloye, Business Insider Africa