Anti-money laundering (AML) frameworks in Eastern and Southern Africa are being strengthened through a landmark $5.2 million regional project, aiming to build robust defenses against financial crime and terrorism financing. Orchestrated by the African Development Bank Group (AfDB) in partnership with the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), this initiative targets five transition countries—Burundi, Eritrea, Madagascar, Mozambique, and South Sudan—where gaps in compliance infrastructure leave the region especially vulnerable.

The three-year Regional Capacity Development Project for Eastern and Southern Africa Anti-Money Laundering Group (ES-CAD-AML) demonstrates a major commitment to tightening the continent’s compliance controls, with support directly from the AfDB’s Transition Support Facility. It complements existing Bank strategies, including the Policy on the Prevention of Illicit Financial Flows and the Bank’s Action Plan for Anti-Money Laundering and Combatting Illicit Financial Flows (2024–2026). As illicit finance continues to undermine economies and development across the continent, this program marks a significant escalation in the regional response.

Why AML Capacity Building Matters in Africa

Money laundering and terrorism financing remain persistent challenges in Africa, with significant cross-border risks linked to weak financial oversight, under-resourced institutions, and complex geopolitical environments. The five countries prioritized under the project—Burundi, Eritrea, Madagascar, Mozambique, and South Sudan—face heightened threats due to political instability, porous borders, and the rapid evolution of illicit financial techniques.

Strengthening AML capacity involves much more than policy writing or box-ticking exercises. It demands:

• The development of skilled professionals in financial intelligence units (FIUs) and supervisory authorities.
• Implementation of real-time monitoring and suspicious transaction reporting.
• Effective legal frameworks that comply with Financial Action Task Force (FATF) standards, including the forty recommendations and the FATF Methodology (updated as recently as 2025).
• Enhanced cross-border cooperation, crucial for countries with extensive informal economies and cash-based sectors.

According to FATF’s public evaluation, countries in Eastern and Southern Africa lag behind global peers in technical compliance and effectiveness ratings, particularly regarding risk assessment, preventive measures, and beneficial ownership transparency. Gaps in customer due diligence (CDD), poor integration of digital identity tools, and insufficient public-private collaboration further hamper progress.

International organizations, including the AfDB and ESAAMLG, therefore prioritize capacity building as a critical pillar for reducing financial crime and boosting confidence among foreign investors and correspondent banks.

ESAAMLG’s Pivotal Role in Regional Compliance

ESAAMLG, one of the FATF-style regional bodies (FSRBs), plays a strategic role in harmonizing anti-money laundering and counter-terrorism financing efforts among its 21 member states. As an FATF associate member, ESAAMLG’s objectives include:

• Promoting effective implementation of AML/CFT/CPF standards issued by FATF.
• Conducting mutual evaluations of member countries to assess legal, regulatory, and operational compliance.
• Providing technical assistance and training to authorities.
• Coordinating with international partners, such as GIABA (West Africa), GABAC (Central Africa), and the global FATF network.

The newly launched project aligns closely with ESAAMLG’s ongoing third round of mutual evaluations, a rigorous peer-review process that rates countries’ AML/CFT effectiveness. Results from these mutual evaluations directly influence the region’s access to international financial markets, as non-compliance can trigger de-risking by global banks and reduced access to correspondent services.

ESAAMLG also functions as a bridge between regional priorities and global AML trends, including new typologies of illicit finance, the use of emerging technologies in compliance, and adaptation to FATF’s updated methodology and risk-based approach guidance.

African Development Bank’s Strategic AML Agenda

The African Development Bank has deepened its engagement in financial crime compliance, not only as a funder but also as a policy shaper and observer member of ESAAMLG. The AfDB’s growing AML portfolio reflects several priorities:

• Providing direct technical assistance and grants for countries facing instability or conflict.
• Supporting regional bodies like ESAAMLG, GIABA, and GABAC, which act as force multipliers in the continent’s compliance landscape.
• Aligning all new development finance, infrastructure, and private sector projects with robust due diligence standards to reduce the risk of illicit flows.

Recent developments highlight AfDB’s shift toward a more proactive stance on AML/CFT, especially with the release of its Action Plan for Anti-Money Laundering and Combatting Illicit Financial Flows (2024–2026), and its updated Policy on the Prevention of Illicit Financial Flows. These documents emphasize not only traditional AML/CFT controls, but also address:

• Risk-based supervision
• Beneficial ownership transparency in corporate registries
• Greater financial inclusion through digitization
• Coordination with multilateral institutions, donors, and the FATF

As Africa’s economic growth accelerates, particularly in sectors like fintech, mining, and cross-border trade, the AfDB’s commitment to fighting financial crime ensures that economic gains are not siphoned off by criminal networks or terrorist financiers.

Progress, Challenges, and What Lies Ahead

While the $5.2 million project represents a significant boost, the battle against money laundering and terrorism financing in Africa remains complex and evolving. Several challenges persist:

• Resource constraints in fragile and conflict-affected states.
• Rapid technological change, including the spread of cryptocurrencies and mobile money, which can facilitate both financial inclusion and illicit finance.
• Coordination gaps between law enforcement, financial regulators, and private sector actors.
• The persistent use of trade-based money laundering schemes and cash smuggling.

Despite these obstacles, the project’s integrated approach—combining technical training, legislative support, and regional cooperation—offers a sustainable path forward. With ESAAMLG’s ongoing mutual evaluation rounds and AfDB’s institutional backing, member states are positioned to:

• Close gaps in beneficial ownership information and enforce real-time reporting standards.
• Build advanced analytics capabilities in FIUs to spot emerging typologies and red flags.
• Foster a culture of compliance throughout financial institutions, including microfinance and mobile money operators.

Crucially, progress in these areas will enhance Africa’s reputation as a safe and credible destination for investment and international partnerships. It will also directly support broader policy goals, including the African Union’s Agenda 2063 and the United Nations Sustainable Development Goals, by reducing the systemic leakage of public funds and enabling more transparent governance.

What the $5.2 Million Project Means for Africa’s Financial Integrity

The AfDB-ESAAMLG partnership, anchored by this new $5.2 million grant, marks a turning point for regional AML and CFT capacity building in Africa. As regulatory frameworks are strengthened and compliance professionals are empowered, vulnerable member states are better positioned to detect, deter, and disrupt illicit finance. The project not only fills technical gaps, but also signals a broader shift toward a unified African approach to financial crime risk.

By anchoring its AML agenda in international standards, and focusing on local realities, Africa is poised to protect its financial systems from abuse, foster economic resilience, and ensure the benefits of growth are broadly shared.

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Related Links

• ESAAMLG Official Website
• African Development Bank – Policy on Prevention of Illicit Financial Flows
• FATF 40 Recommendations
• AfDB Action Plan for AML and Combatting Illicit Financial Flows 2024-2026
• ESAAMLG Mutual Evaluation Process

Other FinCrime Central Articles About West Africa Also Launching Regional Initiatives

• Civil Society Drives Fresh Momentum Against Money Laundering in West Africa
• West Africa’s Tangible Progress in Combating Money Laundering in 2025

Source: ESAAMLG

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