Evaluating the Effectiveness of Nigeria’s Anti-Money Laundering Regulatory Framework

Nigeria's anti-money laundering framework, anchored by the Money Laundering (Prevention and Prohibition) Act 2022 and the NFIU, represents a substantial legislative effort whose operational effectiveness requires professional evaluation against FATF Forty Recommendations and third-country mutual evaluation standards. This study evaluated the effectiveness of Nigeria's AML regulatory framework, drawing on primary research and documentary analysis. A professional evaluation methodology was employed, combining review of NFIU annual reports (2020 to 2023), the GIABA 2021 Mutual Evaluation of Nigeria, and structured interviews with 15 compliance officers from commercial banks, 8 NFIU officials, and 6 legal professionals specialising in financial crime. Evaluation dimensions covered compliance programme quality in reporting entities, suspicious transaction reporting volumes and quality, financial intelligence unit operational effectiveness, prosecution rates, and beneficial ownership transparency. Results showed STR filing increasing from 68,000 in 2020 to 142,000 in 2023, but actionable intelligence conversion remaining below 12 percent due to report quality deficiencies. Beneficial ownership registration was assessed as incomplete for 73 percent of Nigerian corporate entities. Prosecution and asset recovery rates remained significantly below FATF adequacy thresholds. Real estate and designated non-financial business sectors showed AML compliance rates below 35 percent. The study recommends mandatory real estate AML compliance, enhanced STR quality training for reporting entities, and accelerated beneficial ownership register implementation as priority reform actions.

Keywords: anti-money laundering, NFIU, Nigeria, financial crime, AML framework