EFCC Risk Assessment Identifies NPOs Vulnerable to Terrorist Financing, Strengthens Nigeria’s AML/CFT Framework

Nigeria’s targeted assessment of the non-profit sector signals a shift towards evidence-based supervision, allowing regulators to address terrorist financing risks while protecting legitimate charitable organisations from disproportionate compliance burdens.

The Economic and Financial Crimes Commission (EFCC) has disclosed that Nigeria’s nationwide terrorist financing risk assessment of Non-Profit Organisations (NPOs) has enabled authorities to identify the limited number of organisations potentially vulnerable to abuse by terrorist financiers while ensuring that legitimate charities and civil society groups are not subjected to unnecessary regulatory restrictions.

The anti-graft agency said the exercise represents a significant advancement in Nigeria’s anti-money laundering and counter-terrorist financing (AML/CFT) regime by moving away from broad assumptions towards a targeted, intelligence-led approach to financial crime risk management.

EFCC Chairman, Olanipekun Olukoyede, made the disclosure at the Third Africa High-Level Civil Society AML/CFT Conference in Abuja, themed “Implementing FATF Recommendation 8 Correctly: Practices, Lessons Learned and Opportunities for Reform.”

Represented by the Director of the Special Control Unit Against Money Laundering (SCUML), Harry Erin, Olukoyede said the assessment was conducted through collaboration among key stakeholders, including the EFCC, SCUML, the Nigerian Financial Intelligence Unit (NFIU), the Office of the National Security Adviser, the Corporate Affairs Commission (CAC) and civil society organisations.

According to him, the process involved extensive consultation, technical analysis and engagement with the non-profit sector, enabling regulators to identify genuine vulnerabilities without imposing blanket restrictions on organisations operating legitimately.

“The assessment has enabled Nigeria to move beyond broad assumptions and towards a more targeted understanding of terrorist financing vulnerabilities,” he said, adding that the approach strengthens the country’s ability to mitigate risks while allowing legitimate NPOs to continue their humanitarian and development activities.

Olukoyede stressed that the Financial Action Task Force (FATF) Recommendation 8 framework was not designed to regulate or restrict all non-profit organisations. Rather, it requires jurisdictions to identify organisations that may be vulnerable to terrorist financing abuse and apply proportionate, risk-based measures.

He noted that civil society organisations remain critical partners in humanitarian response, education, healthcare delivery, youth empowerment, conflict prevention and support for vulnerable communities, making their continued participation essential to sustainable development.

Regulatory Shift Towards Risk-Based Supervision

Executive Director of Spaces for Change (S4C), Victoria Ibezim-Ohaeri, said Nigeria’s AML/CFT reforms over the past decade have improved engagement between regulators and non-profit organisations while addressing unintended consequences arising from earlier approaches to Recommendation 8 implementation.

She recalled that initial discussions around FATF Recommendation 8 were marked by tension and mistrust, but sustained engagement between government agencies and civil society stakeholders has produced important reforms.

These reforms include Nigeria’s standalone terrorist financing risk assessment of the non-profit sector, the removal of provisions that previously classified NPOs as obliged reporting entities under AML laws, and improved compliance with FATF Recommendation 8 requirements.

Ibezim-Ohaeri said ongoing reforms under SCUML leadership are helping to promote greater financial inclusion for non-profit organisations while ensuring that AML/CFT controls remain effective and proportionate.

She added that Nigeria’s experience is providing valuable lessons for other African jurisdictions, including Ghana, The Gambia, Togo and Burkina Faso, as they strengthen their own financial crime compliance frameworks.

FATF Standards Must Protect Civic Space

Delivering the keynote address, United Nations Special Rapporteur on the Promotion and Protection of Human Rights while Countering Terrorism, Prof. Ben Saul, warned against treating the entire non-profit sector as vulnerable to terrorist financing.

Saul noted that most NPOs do not present terrorist financing risks and emphasised that the revised FATF Recommendation 8 requires countries to focus regulatory measures only on organisations identified through evidence-based risk assessments.

He cautioned that excessive compliance requirements could divert resources away from humanitarian operations, peacebuilding initiatives and human rights programmes. In some jurisdictions, he said, poorly applied counter-terrorism measures have also contributed to restrictions on legitimate civil society activities.

He called for regular, evidence-driven risk assessments developed through consultation with non-profit organisations, stressing that human rights considerations and effective counter-terrorism measures should reinforce each other.

Strengthening Africa’s Financial Integrity

Earlier, Chairman of the Board of Spaces for Change, Samuel Diminas, highlighted Africa’s continued challenge with illicit financial flows, estimated at more than $88 billion annually.

He said these losses represent resources that could otherwise support critical development priorities, including healthcare, education and infrastructure.

Diminas said effective AML/CFT compliance requires collaboration rather than confrontation among governments, regulators, financial institutions and civil society.

The conference reinforced the growing regulatory consensus that sustainable financial crime prevention depends on risk-based supervision, stakeholder engagement and intelligence-led enforcement. For compliance professionals and financial institutions, Nigeria’s approach provides an example of how targeted regulation can strengthen financial integrity while preserving legitimate economic and social activities.