Dual-speed compliance in Nigeria’s anti-money laundering and counter-financing terrorism regime: understanding sectoral disparities in the implementation of FATF international standards

PurposeThis paper aims to explain why the implementation of Financial Action Task Force (FATF) anti-money laundering (AML) and counter-financing of terrorism (CFT) standards vary significantly across sectors within the same national jurisdiction. Using Nigeria as a case study, the paper introduces the concept of dual-speed compliance to explain persistent gaps between technical compliance and functional effectiveness.Design/methodology/approachThe study adopts a qualitative research design. Data were collected through 36 semi-structured interviews with regulators, financial institutions, designated non-financial businesses and professions (DNFBPs) and security agencies, supplemented by two focus group discussions. Documentary analysis of FATF and Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) mutual evaluation reports, national risk assessments and relevant legislations was also undertaken. Data were analysed using thematic analysis to enable a systematic cross-sector comparison.FindingsThe paper shows that AML and CFT compliance in Nigeria operates at differentiated regulatory speeds. Banks and formal financial institutions demonstrate relatively high compliance, which is driven by intensive supervision, international financial exposure and significant compliance investments. In contrast, DNFBPs exhibit weak and uneven compliance because of limited oversight, low awareness, capacity constraints and insulation from global financial pressures. Informal economic actors largely remain outside the regulatory perimeter, resulting in near-total non-compliance and displacement of illicit financial activity.Research limitations/implicationsThe study relies on qualitative data from a single country case, limiting statistical generalisability. However, the findings offer analytical insights that are applicable to other high-informality developing economies. Future research could apply the dual-speed framework comparatively across jurisdictions.Practical implicationsThe paper highlights the need for sector-specific, risk-based supervisory strategies, targeted DNFBPs capacity-building and policies that integrate informal actors through digital identity and financial inclusion initiatives.Originality/valueThe paper offers original value by introducing dual-speed compliance as a framework for analysing intra-state variation in AML and CFT implementation, which is supported by rare qualitative evidence from a high-informality developing economy.