In February 2024, FATF gray-listed Kenya and Namibia due to anti-money laundering and counter-terrorist financing concerns.
This development is critical, as both countries aim to establish themselves as secure, investment-friendly environments within Africa.
Kenya and Namibia’s presence on the gray list acknowledges strategic AML/CTF deficiencies in both countries.
They must now act swiftly to address these issues, under FATF’s guidance, without being subjected to the strictest scrutiny reserved for those on the “black list.”
This scenario underscores the importance of a risk-based approach to remediate the identified shortcomings.
Kenya’s robust FDI efforts, like the $1.5 billion Eurobond, face risks with potential listing implications.
FATF gray-listing historical trends and IMF research suggest decreased foreign payments, impacting primary exchange sources and the economy.
Namibia, striving to boost FDI in its energy sector, faces a similar predicament.
Acknowledging the urgency, Namibia’s central bank governor has committed to a comprehensive strategy to rebuild global trust in the country’s financial system.
Now, both nations must enhance their financial oversight and regulatory frameworks to effectively address FATF‘s concerns.
This includes bolstering their financial reporting agencies and ensuring their national AML/CTF strategies meet global standards.
Despite efforts to expedite reforms, achieving prolonged removal from the gray list requires continuous cohesive action.
The recent removal of the United Arab Emirates and Gibraltar from the gray list serves as encouragement.
Reform efforts and international cooperation can address FATF concerns, restoring financial system confidence.
In short, Kenya and Namibia must strengthen financial integrity frameworks to secure positions as global investment destinations.