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The head of the Central Bank of Nigeria (CBN) has told financial institutions (FIs) that implementing a “robust” culture of compliance will be “critical” to the country’s exit from the Financial Action Task Force's (FATF) grey list in 2025.
Speaking at a Nigerian bankers conference last week, CBN governor Olayemi Cardoso said he is “optimistic” that Nigeria will be removed from the FATF grey list by Q2 next year.
However, an exit from the grey list may not be possible, or may be short-lived, he said, without a renewed focus on compliance culture among firms.
“Regarding Nigeria’s inclusion on the FATF grey list, we fully recognise the problems this presents, and are addressing legacy deficiencies with utmost urgency,” he said. “Building a robust culture of compliance remains central to our efforts.”
Going into 2025, Cardoso outlined his vision of a compliance culture shift that he argues must take place among financial institutions in Nigeria for the country to secure its exit from the grey list.
“Executives and boards set the tone by making compliance a strategic priority, championing zero tolerance for breaches — not just in policy, but in practice,” he said.
“Teams are educated to recognise red flags and are encouraged to report concerns about fraud, money laundering or unethical behaviour, knowing they are protected.”
The central bank governor said that FIs should anticipate vulnerabilities and proactively address risks in business areas that are susceptible to abuse.
He warned, for example, that FIs must know their customers and partners, and must ensure that they conduct enhanced due diligence on high-risk clients and vendors, especially politically exposed persons (PEPs).
Finally, he said, FIs must collaborate to combat systemic threats, share information on emerging risks and cooperate with law enforcement, while maintaining open communication with the CBN and other regulators.
Cardoso said that, starting in 2025, FIs will be required to “refine” their compliance and governance frameworks to address evolving risks.
“A bank that prioritises compliance does more than protect itself — it straightens the entire financial ecosystem,” he said. “It directs financial resources toward growth, innovation and prosperity rather than crime and corruption.
“Together, we must exceed standards, demonstrating to the public and the world that we are stewards of integrity and trust.”
Failure to meet these challenges will result in enforcement action, Cardoso added.
Pointing to recent actions, Cardoso said the CBN had imposed NGN15bn ($9m) of penalties against 29 banks for anti-money laundering and counter-terrorism financing (AML/CTF) breaches.
2025 payment system priorities
Cardoso also talked about the CBN’s payment system priorities in 2025 — a key year for the central bank, which will have its progress judged against the goals outlined in its Payments System Vision 2025.
Next year, the CBN will prioritise the implementation of Nigeria’s open banking framework, alongside further enhancement to the country’s contactless payment systems.
The central bank will also expand its regulatory sandbox and undertake a comprehensive review of the implementation of the e-Naira, its retail central bank digital currency (CBDC).
In the Payments System Vision 2025, the CBN called on the financial sector to assist in creating an open banking roadmap for Nigeria.
“The mandate would be to define the regulatory environment and structure, most likely based on the Europe PSD2 model, and a timeline for adoption,” it said.
“Separately, the workgroup would define a library of APIs that should be supported by the local market.”
In March 2023, the CBN published its Operational Guidelines for Open Banking in Nigeria, becoming the first African regulator to do so.
e-Naira marked by ‘disappointingly low’ uptake
Meanwhile, the e-naira continues to struggle, having seen little in the way of adoption since its launch in October 2021.
At the time, Nigeria was the first country in Africa — and the second country in the world — to launch a CBDC (following in the footsteps of the Bahamas, which launched its sand dollar in October 2020).
In March 2023, the International Monetary Fund (IMF) published a study looking at trends in adoption of the e-Naira during its first year.
It found that the e-naira wallet had been downloaded fewer than 1m times during its first year, and had been used to make fewer than 0.2 transactions per month on average.
Given Nigeria’s population of 224m — and its unbanked population of 36m — the IMF concluded that adoption of the e-Naira during its first year was “disappointingly low”.
However, as noted by Cardoso, the CBN still sees the e-naira as a tool for encouraging “quick and affordable” cross-border payments and a “critical step” toward unlocking trade and investment.
“The e-naira, our CBDC, holds significant growth potential,” he said. “We will therefore undertake a comprehensive review of its implementation to optimise broad and positive economic impact.”
