A Professional Assessment of the Legal Framework for Anti-Money Laundering Compliance in Nigeria’s Financial Sector

Anti-money laundering compliance is a critical legal obligation for Nigerian financial institutions under the Money Laundering Prevention and Prohibition Act 2022, CBN AML-CFT regulations, and FATF Mutual Evaluation requirements, yet the quality of compliance across banking, insurance, and capital market entities varies significantly. This study provides a professional assessment of AML-CFT compliance frameworks in Nigeria's financial sector, focusing on customer due diligence, transaction monitoring, suspicious activity reporting, and FATF Recommendation alignment. Structured interviews were conducted with 30 compliance officers, AML specialists, and NFIU officials. Review of NFIU annual reports, CBN examination findings, and financial intelligence analytical data from 2020 to 2023 was undertaken. Results indicate that suspicious transaction reporting remains significantly under-utilised, with Nigeria's STR submission rate among the lowest in comparable markets. Beneficial ownership identification is inadequate, particularly for corporate customers with complex holding structures. Politically exposed persons screening produces significant false positives that reduce operational efficiency. The study concludes that AML-CFT compliance in Nigeria is compliance theatre-driven rather than risk intelligence-driven in many institutions. Recommendations include mandatory AML effectiveness testing alongside rule-based compliance audits, beneficial ownership transparency registry legislation, and NFIU capacity enhancement through international technical assistance programmes from the Egmont Group.

Keywords: anti-money laundering, AML-CFT compliance, NFIU, suspicious transaction reporting, FATF