Africa is fighting financial crime with tougher laws and stricter oversight of high-risk sectors, marking a turning point in the continent’s push to tackle corruption and illicit finance.
Key takeaways
- Africa is cracking down on financial crime with sweeping regulatory reforms.
- Companies face growing liability as regulators expand the scope of financial crime enforcement.
- AI tools can help companies stay compliant by automating risk assessments and fraud detection.
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Financial crime strips up to US$100 billion from African countries every year, according to the Mo Ibrahim Foundation’s 2024 Forum Report.
Systemic corruption, weak enforcement, and compromised judicial systems in many countries enable illicit activity – putting companies and consumers at risk.
The continent’s vulnerability is no secret: several major jurisdictions appear on the Financial Action Task Force’s (FATF) “grey list” and the European Commission’s list of high-risk countries due to inadequate anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks.
Calls for regulatory reform are growing louder. In July 2025, the Organisation for Economic Co-operation and Development published a memo urging South Africa to enhance its institutional and enforcement strength to stifle corruption in the country.
In response, key governments are stepping up their efforts to tackle financial crime. Kenya enacted a revised AML/CTF bill in June 2025 expanding regulatory oversight to cover high-risk sectors. Elsewhere, South Africa proposed an amended AML/CTF bill in December 2024, building on the country’s push to exit the FATF grey list.
International collaboration is also intensifying. In February 2025, the African Development Bank partnered with Interpol to tackle financial crime across the continent.
Lexology PRO recently explored the rise of cybercrime in Africa. Now, we look at the continent’s financial crime landscape, examining recent regulatory developments and the outlook for enforcement.
A target for financial crime
Africa’s exposure to financial crime is well documented by anti-corruption watchdogs, who cite illicit financial flows and entrenched corruption as key risk factors. Sub-Saharan Africa registered the lowest average score on Transparency International’s 2024 Corruption Perceptions Index, published in February 2025.
Three fundamental challenges for Africa stand out.
Corruption as a catalyst
Systemic corruption at the highest level – ranging from government officials to Supreme Court judges – significantly undermines Africa’s enforcement efforts, allowing illicit actors to exploit compromised governance structures and bypass legal guardrails.
Complicit law enforcement – such as the July 2025 suspension of South Africa’s police minister over alleged ties to organised crime networks – further undermines institutional credibility, underscoring the depth of the issue.
The reality for African companies is that they “do not have the comfort that their interests will be protected by vigilant and active enforcement authorities or that they will have a predictable process for legal recourse in the form of recovery of losses suffered as a result of financial crimes,” according to Cameron Dustan-Smith, Johannesburg-based partner at Herbert Smith Freehills Kramer.
Digital blind spots
Despite the prevalence of internet and mobile phone usage in Africa, digital illiteracy remains a barrier to cybersecurity awareness – inviting cyber-related financial crimes, such as phishing and business email compromise.
In 2023, phishing and online extortion stole over 1 billion rand (US$54.2 million) from consumers in South Africa.
As digital threats grow, stronger regulatory action is required. “From a financial crime perspective, there will need to be constant regulatory enhancements and adaptation to keep pace with the move to an increasingly digital business landscape,” HSF Kramer’s Dunstan-Smith tells Lexology PRO.
The rise of organised crime
Organised crime is a major driver of financial crime in Africa, particularly through drug trafficking and money laundering. For example, Mexican cartels are reportedly active in South Africa, contributing to rising money laundering risks.
Authorities are responding to the growing threat. In July 2024, Interpol launched a major investigation in West Africa targeting organised crime networks, resulting in approximately 300 arrests and the seizure of assets worth US$3 million.
Governments expand oversight
Corruption and financial crime rank among the biggest barriers to economic and social growth in Africa. Faced with this reality, governments across Africa are ramping up their regulatory defences.
In June 2025, Kenya revised its AML/CTF law to expand oversight across high-risk sectors. Under the amended regulation, which took effect in the same month, dealers in precious metals and stones are now classified as reporting institutions and are required to carry out mandatory customer due diligence, keep records of all transactions, and report suspicious activity to the Financial Reporting Centre, Kenya’s financial intelligence authority. Companies in high-risk sectors, which also include gambling and real estate, must strengthen customer identity checks and carry out AML/CTF targeted staff training.
South Africa’s draft AML/CTF bill, proposed in December 2024, also signals a move toward stricter regulatory scrutiny. Under the revised law, regulators would gain expanded powers to request beneficial ownership information, and companies would be required to report suspicious transactions to the South African Financial Intelligence Centre (FIC) within 15 business days of detection, among other new obligations.
The amendments also significantly enhance the FIC’s authority, enabling it to issue real-time compliance directives and carry out surprise inspections to ensure adherence with the regulations.
Elsewhere, the Central Bank of Nigeria issued draft AML guidelines for financial institutions in May 2025. The guidelines encourage the adoption of AI to enhance real-time monitoring and detection of suspicious activity. This reflects a broader trend in compliance: “regulators are increasingly adopting AI-driven tools to automate risk assessments, detect fraud, and monitor suspicious transactions in real time,” according to Rebecca Thomson, Johannesburg-based partner at Baker McKenzie.
In Mauritius, companies now face asset confiscation and fines up to 20 million rupees (US$435,634) for failing to implement adequate controls to prevent financial crime under sweeping anti-corruption reforms introduced in March 2024.
These regulatory shifts align with broader efforts to improve governance and transparency across Africa, with some jurisdictions introducing new rules promising enhanced whistleblower protections.
What can companies expect next?
Stricter enforcement is on the horizon, and companies risk broader liability and heavier penalties. Under South Africa’s draft AML/CTF bill, companies face fines up to 10 million rand (US$550,000) or 10% of a company’s turnover for non-compliance with new beneficial ownership requirements under amendments to the Companies Act 2008.
Additionally, ESG-related violations – such as illegal mining and deforestation – are “increasingly being treated as financial crimes, especially in sectors vulnerable to corruption and exploitation,” explains Baker Mckenzie’s Thomson.
To navigate this evolving landscape, companies should sharpen their risk assessments, implement sector-specific AML programmes where needed, and actively engage with regulators.
Technology can play a key role in supporting compliance.
“Automation in compliance reporting, ESG tracking and risk management, and use of AI tools for fraud detection and predictive analytics will vastly improve companies’ abilities to meet increasing regulatory demands, and also to stay ahead of financial crime risks as they develop over the coming years,” Baker McKenzie’s Thomson adds.
Meanwhile, South Africa and Mozambique are on track to be removed from the FATF grey list in the coming months. For countries aiming to follow suit, cross-border collaboration is essential.
“Should countries wish to move off the FATF grey list, it would be expected that cooperation on AML/CTF issues will need to increase between those greylisted countries at a minimum,” says HSF Kramer’s Dunstan-Smith. In a recent example of this collaboration, the Financial Intelligence Units of Botswana and Tanzania signed a memorandum of understanding signed on 30 August 2025 to strengthen joint efforts against financial crime.
As financial crime moves into the regulatory spotlight, businesses operating in Africa must act fast and embed compliance into daily operations to stay ahead of sharper enforcement.