South Africa and Nigeria are set to be removed from a global financial watchdog’s “gray list” of countries under heightened scrutiny, Bloomberg reported, in a move that could attract investors to sub-Saharan Africa’s largest economies. The countries were added to the Financial Action Task Force’s list in February 2023 for failing to tackle money laundering.
The countries, along with Burkina Faso and Mozambique, could be removed from the gray list as soon as next month after FATF assessors noted significant progress, according to Bloomberg. The watchdog’s assessments are scrutinized by global investors: In a 2021 report, the IMF found gray-listed countries experienced “a large and statistically significant reduction in capital inflows.”
Nigeria and South Africa have in recent years implemented policies aimed at improving financial transparency to attract investment. Abuja published guidance on how the private sector should work with government agencies to tackle financial crimes, and Pretoria has strengthened legislation on the disclosure of beneficial ownership for companies and trusts.