By Adewale Sanyaolu
Rising tensions in the Middle East have once again exposed the fragile energy architecture of many African economies, particularly oil-producing nations that lack sufficient domestic refining capacity. As global markets react to geopolitical uncertainty in one of the world’s most strategic oil-producing regions, the ripple effects are already being felt across continents.
For Africa, the implications are both immediate and profound.
The Middle East remains the nerve centre of global oil supply, with key shipping routes such as the Strait of Hormuz serving as the lifeline for a significant portion of the world’s crude exports. Any disruption in this corridor—whether through conflict, sanctions or heightened military activity—inevitably triggers volatility in international oil prices.
When prices spike, the impact quickly cascades through global supply chains, raising transportation costs, increasing inflation and slowing economic growth in vulnerable economies.
Ironically, some of the most vulnerable countries in this scenario are Africa’s oil-producing nations themselves. Despite their vast crude reserves, many of these countries still depend heavily on imported refined petroleum products due to inadequate local refining capacity. Nigeria, Angola and several other producers continue to export crude oil while importing petrol, diesel and aviation fuel to meet domestic demand.
This structural paradox has long defined the continent’s energy dilemma. It means that while higher crude prices may temporarily boost government revenues from exports, the same price surge simultaneously raises the cost of importing refined products. In many cases, the gains from crude exports are neutralised by the increased financial burden of fuel imports.
For citizens, the consequences are swift and painful. Fuel price increases quickly translate into higher transportation costs, rising food prices and increased production expenses for businesses. In countries where electricity supply is unreliable and diesel generators are widely used, higher fuel costs also mean more expensive electricity for households and small businesses.
The result is a chain reaction that pushes inflation upward and erodes purchasing power across the economy.
In Nigeria’s case, the situation has historically been worsened by the country’s limited refining capacity despite being one of Africa’s largest crude oil producers. For decades, the nation relied almost entirely on imported petroleum products due to the inefficiency of its state-owned refineries. This dependence left the economy exposed to global market shocks whenever geopolitical tensions pushed oil prices upward.
However, recent developments in the domestic refining landscape offer a glimpse of hope. The emergence of large-scale refining infrastructure, particularly private sector investments, signals a gradual shift toward reducing dependence on imported fuel.
Increased local refining capacity has the potential to moderate supply disruptions, conserve foreign exchange and improve energy security.
Yet even with domestic refining, African economies cannot completely insulate themselves from global oil volatility. Crude oil remains an internationally traded commodity priced on global benchmarks. As long as domestic fuel prices are linked to global crude markets, geopolitical developments in distant regions such as the Middle East will continue to influence energy costs across Africa.
This is why the current crisis should serve as a wake-up call for policymakers across the continent. Beyond expanding refining capacity, African countries must rethink their broader energy strategies. Diversification into petrochemicals, investment in renewable energy and development of regional energy markets are essential steps toward building more resilient economies.
Equally important is prudent management of oil revenues during periods of high prices. History shows that oil windfalls in many resource-rich African countries are often absorbed into short-term government spending rather than long-term investments that strengthen economic resilience. Infrastructure, industrialisation and energy transition projects should become the priority destinations for such revenues.
The lesson from every Middle East crisis is clear: global energy shocks will continue to occur, and their effects will continue to reverberate across the world. For Africa’s oil-rich but refining-poor economies, the real challenge is not merely surviving these shocks but using them as catalysts for structural transformation.
Until that transformation occurs, events thousands of miles away in the Middle East will continue to shape the daily economic realities of millions of African citizens—from the cost of transportation to the price of food on the table.
The time has come for Africa to break free from the paradox of being rich in crude oil yet vulnerable in energy security. Only then can the continent truly shield its citizens from the recurring turbulence of the global oil market.
Banks, mobile money operators, international money transfer operators and other financial institutions in Nigeria are required to deploy automated anti-money laundering (AML) systems under new baseline standards issued by the Central Bank of Nigeria (CBN). The CBN under its Governor, Olayemi Cardoso has strengthened financial crime detection and compliance mechanisms across the sector. The move is expected to boost investors’ confidence and foreign capital inflows to the domestic economy.
Automation is at the centre of sustainable and thriving business systems across the world. And when it comes to financial crimes prevention and controls, automation makes it seamless and builds stakeholders’ confidence in the financial system.
That explains the new move by the CBN under the leadership of its Governor, Olayemi Cardoso to firm-up anti-money laundering (AML) controls around banks, Fintechs and other financial institutions. The CBN’s new guidelines strengthens framework for implementing automated AML, Combating the Financing of Terrorism (CFT) and Countering Proliferation Financing (CPF) solutions. The overall purpose is to improve the ability of financial institutions to detect and report suspicious transactions in real time.
In a circular, co-signed by CBN Director, Banking Supervision Department, Akinwunmi, Olubukola and Olubunmi Ayodele-Oni of the CBN Compliance Department, said the new standards are designed to enhance compliance with existing AML, CFT and CPF regulations while encouraging the adoption of emerging technologies to strengthen financial crime risk management.
Likewise, the implementation of the guidelines takes effect immediately from the date of issuance, with financial institutions expected to begin deploying automated systems to support transaction monitoring and regulatory reporting.
Under the new framework, deposit money banks have been given an 18-month deadline to fully comply with the requirements, while other financial institutions, including fintech companies and payment service providers, have 24 months to complete implementation.
The CBN also directed all affected institutions to submit detailed implementation roadmaps to its Compliance Department within three months of the issuance of the circular, outlining how they intend to transition to the new automated AML systems.
Experts said the move is intended to improve the speed and accuracy of detecting suspicious financial activities and reduce the risks of money laundering, terrorism financing and proliferation financing within the Nigerian financial system.
The Automated AML systems typically use advanced analytics, data monitoring tools and artificial intelligence to track large volumes of transactions, flag unusual patterns and generate alerts that can be investigated by compliance teams. The baseline standards will support financial institutions in deploying such technologies in a structured manner while ensuring that their systems align with regulatory expectations.
The CBN disclosed that it will continue to monitor developments within the financial system and may issue additional guidance where necessary to ensure effective implementation of the new framework.
“All stakeholders are required to ensure strict compliance with the guidelines and all other regulations,” the circular stated, noting that the measure forms part of the CBN’s broader efforts to promote financial system stability and integrity,” it said.
The Financial Action Task Force (FATF) recently removed Nigeria from its grey list of countries with money laundering and terrorist financing risks. Commenting on the announcement, Cardoso, said: “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system it reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.”
The FATF leads global action to tackle money laundering, terrorist and proliferation financing. The 40-member body, which has the backings of the World Bank Group and International Monetary Fund (IMF) sets international standards to ensure national authorities can effectively go after illicit funds linked to drugs trafficking, the illicit arms trade, cyber fraud and other serious crimes.
For Nigeria, exiting FATF grey list, opened her potential in the global financial markets. The FATF leads global action to tackle money laundering, terrorist and proliferation financing.
The Paris-based watchdog’s decision represents a huge progress for Nigeria financial system as it works to restore investor confidence, reduce the cost of capital and strengthen financial system credibility. Other countries removed from the list include, South Africa, Mozambique and Burkina Faso.
“As of February 2025, the FATF has reviewed 139 countries and jurisdictions and publicly identified 114 of them. Of these, 86 have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process,” the report said.
FATF identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation. “For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country,” it said.
By closing gaps in regulatory oversight and enhancing enforcement against illicit financial flows, the four nations have now met the FATF’s requirements for delisting, boosting their standing among global financial institutions and capital markets. Nigeria and South Africa were added to the list in February 2023 while Mozambique was included in October 2022 and Burkina Faso initially in February 2021.
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr Aminu Gwadabe, said: “The recent announcement of the Financial Action Task Force on the exit of Nigeria from its Grey list known as Dirty money list shows Nigeria commitment in achieving the 40 FATF recommendations. The move has tremendously induced confidence, and removed tension in the financial market”.
The rapid expansion of Nigeria’s fintech ecosystem presents a strategic opportunity to drive inclusive economic growth, deepen financial resilience, and strengthen the country’s position within the evolving global digital economy.
Fintech offers a powerful mechanism for extending access to underserved and excluded populations. With mobile phone penetration far outpacing access to traditional financial services, there is a compelling opportunity to bridge the gap between digital reach and financial access.
The CBN Fintech Report themed: “Shaping the Future of Fintech in Nigeria: Innovation, Inclusion and Integrity” released recently, highlighted several persistent barriers, including limited identity verification systems, affordability, and infrastructure gaps, that constrain broader inclusion. Addressing these barriers is central to unlocking inclusive financial sector growth.
This report, developed through extensive stakeholder consultation and supported by a nationwide ecosystem survey, assesses the current state of Nigeria’s fintech environment, identifies strategic priorities, and outlines policy pathways to guide the next phase of development. The research points to a compelling opportunity: Nigeria can lead not just in adoption but in the design of the global fintech future, provided it enhances collaboration between regulators and innovators, strengthens infrastructure and policy reforms, and communicates progress with clarity.
It explained that strengthening Nigeria’s role in shaping continental standards and promoting mutual recognition frameworks could help consolidate regional leadership in Africa’s digital economy. Beyond regional integration, Nigeria is also increasingly positioned to contribute to the shaping of global digital finance corridors.
These objectives underscore not only ecosystem priorities but also Nigeria’s opportunity to enhance its international standing by demonstrating regulatory leadership, particularly in areas like Anti-Money Laundering (AML) enforcement, consumer protection, and real-time payments infrastructure.
Cardoso said he witnessed first-hand the transformative power of digital finance to broaden economic participation, create meaningful employment, and improve the lives of millions of Nigerians. It is for this reason that the CBN is intent on seizing our nation’s unique opportunity to harness fintech innovation for national development.
“Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, our nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems. Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” he said.
He explained that with improved stability of Nigeria’s currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale. “This report reflects the Central Bank’s commitment to fostering a thriving fintech landscape while safeguarding the stability of our financial system. It is the product of extensive engagement between regulators and industry stakeholders. By surveying fintech operators, financial institutions and policymakers, we have gathered candid insights on what is working, what is not, and where we can do better”.
“The findings illuminate both our progress and the gaps we must address, from modernising regulatory frameworks and payments infrastructure to supporting startups in reaching Nigeria’s unbanked communities. The report is careful to contextualise Nigeria’s fintech journey within global trends, reminding us that we are part of a rapidly evolving digital finance landscape that offers immense opportunities as well as new risks,” he stated.
According to the report, financial technology, or fintech, refers to the use of innovative digital technologies to deliver financial services. It encompasses a broad range of market segments, from digital payments and remittances to lending platforms, crowdfunding, insurance technology (InsurTech), investment and wealth management technology (WealthTech), and regulatory technology (RegTech).
Sanyaolu is the Assistant Business Editor/Head of Energy Desk, Sun Newspaper.
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