The Central Bank of Nigeria (CBN) has elevated terrorism financing supervision as a top regulatory priority, signalling a renewed focus on how banks and other financial institutions identify, monitor, and report activities that could facilitate terrorism financing.
This move aligns Nigeria with global regulatory trends that emphasise the prevention of illicit funds flowing through financial systems. Robust terrorism financing controls are a core component of the broader financial integrity framework designed to safeguard the sector from exploitation by criminal and prohibited actors.
In a statement issued Tuesday, the CBN said its heightened supervisory focus covers terrorism financing risk management, transaction monitoring, implementation of targeted financial sanctions, and the reporting of suspicious transactions linked to terrorism financing.
The Bank said it would adopt a risk-based supervisory approach—combining both on-site and off-site engagements—to assess and strengthen the effectiveness of Anti-Money Laundering, Countering the Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) controls across the financial sector.
Implications for Financial Institutions
For banks and other regulated entities, this development underscores the need to ensure robust systems for detecting and escalating suspicious financial activity. Institutions are expected to maintain effective controls for identifying unusual transactions, assessing terrorism financing risks, and complying with relevant financial sanctions regimes. The CBN’s commitment to both on-site and off-site supervision means these controls will receive ongoing regulatory scrutiny.
Broader Financial Integrity
Beyond compliance, the CBN’s announcement reinforces Nigeria’s commitment to domestic and international collaboration on counter-terrorism financing, counter-proliferation financing, and the overall protection of the financial system.
The regulator’s position extends beyond individual transactions, underlining the sector-wide importance of effective AML/CFT/CPF frameworks and the expectation that institutions must demonstrate their controls are both present and effective.
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