First published on Royal United Services Institute
Sub-Saharan Africa now accounts for 12 of the 21 jurisdictions on the Financial Action Task Force (FATF) grey list, with Kenya and Namibia added in February 2024. This designation triggers severe economic consequences, including reduced GDP growth, diminished foreign investment, higher transaction costs, and restricted access to international aid—crippling economies already grappling with poverty, corruption, and instability.
The FATF’s standardized evaluation criteria disproportionately penalize low-income African nations, which prioritize immediate crises like food security and civil conflict over technical anti-money laundering (AML) and counter-terrorist financing (CTF) compliance. For example, South Sudan remains grey-listed despite ongoing civil war and humanitarian crises, while countries like Nigeria and Kenya face recurring listings despite limited resources.
Grey listing exacerbates financial exclusion in a region where over half the population lacks bank access. Stricter AML/CFT measures push citizens toward unregulated digital platforms and cryptocurrencies, amplifying risks without addressing systemic issues like illegal wildlife trafficking or gold smuggling. Meanwhile, Africa’s underrepresentation in FATF decision-making—only South Africa holds full membership—leaves the continent subject to rules set by wealthier nations with divergent priorities.