Nigeria

The country of Nigeria, being the largest and one of the most economically influential countries in Africa, offers an intricate, dual-edged business environment involving a lot of risks and rapidly growing regulation. The resource-rich economy of Nigeria is experiencing rapid development in the IT industry, finance, and manufacturing; however, it is under pressure from strong negative macroeconomic trends, inflation, and a lack of infrastructure. Operationally speaking, the risks involved can be attributed to the active risk environment defined by security limitations in the form of the insurgency carried out by Boko Haram and ISWAP in the northern parts of Nigeria.

As a solution to these problems, the country has completely changed its compliance process. One of the highlights was the official removal of Nigeria from the Grey List of FATF, which marked the culmination of years of work done to improve AML/CFT compliance in the country. The CBN and NFIU continue to have a very high level of monitoring despite the removal from the Grey List. Regulated institutions are required to have event-based, real-time automated screening systems, identify ultimate beneficial owners, follow very strict KYC regulations, and file STRs in time. Digital and payment institutions are also required to adhere to very strict data localization/cloud policy architectures.

Corporate governance in Nigeria has moved completely away from the traditional and voluntary codes to very strict standards that are subject to close regulatory supervision by the Corporate Affairs Commission (CAC), the Securities and Exchange Commission (SEC), and the Financial Reporting Council. Working within the framework of the new Companies and Allied Matters Act (CAMA), the authorities are actively introducing administrative changes, such as limited tenure for audit committee chairmen, open reporting on the National Repository Portal, and registration of informal agents like PoS. Non-compliance leaves corporate directors exposed to personal liability.

Nigeria does not receive general international or unilateral sanctions from a sanctions point of view. The country does not have to impose sanctions voluntarily but has to automatically apply UNSCR and function as a dynamic regional sanctioner via ECOWAS. Within the country, the Nigeria Sanctions Committee (NSC) ensures the continuous update of a national watchlist that includes terrorist financiers and accomplices, like those at Bureau De Change (BDC) that do not comply. According to recent CBN directives, banks have to freeze the assets of any organizations placed on the NSC list and the list of other international bodies such as the Office of Foreign Assets Control (OFAC) of the U.S. instantly without prior warning. Therefore, although Nigeria is full of opportunities, success depends on due diligence.