Most African fintechs know they need to screen for politically exposed persons (PEPs). What many still lack is a clear process for handling a potential match. During a CBN examination, it's not enough to show that a screening check ran; your institution also needs to show why a customer was or wasn't classified as a PEP and what happened next.

The CBN's March 2026 Baseline Standards for Automated AML/CFT/CPF Solutions identify PEP screening as one of the required functional areas for automated AML compliance. The focus has shifted beyond running a screening check to documenting the decision behind every PEP classification.

This article explains what a politically exposed person is, who qualifies as one under Nigerian and broader African regulatory frameworks, how PEP screening works in practice, and what your compliance team should do when a match is identified.

What a Politically Exposed Person Actually Is

A politically exposed person (PEP) is someone who holds or has held a prominent public function that carries a higher risk of bribery, corruption, or misuse of public funds.

Under the CBN's PEP Guidance Notes, PEPs fall into three categories:

1. Domestic PEPs: These are individuals who hold or have held prominent public positions in Nigeria. They include senior government officials, judicial and military officers, senior executives of government-owned entities, and important political party officials. This is a large category because PEPs exist across both federal and state levels of government. 

2. Foreign PEPs: These are individuals who hold or have held equivalent senior public positions in another country. If your institution serves cross-border customers or diaspora communities, your screening process should cover foreign PEP records as well as domestic ones.

3. International Organisation PEPs: This category includes senior officials of international organisations, such as directors, deputy directors, and equivalent leadership roles in organisations like the African Union and the United Nations. Under the CBN guidance, their immediate family members and close associates are also included.

Knowing who qualifies as a PEP is important, but effective screening doesn't stop with the individual identified during onboarding.

Who Else Counts: Family Members and Close Associates

Screening only the named PEPs leaves gaps in your AML process. The CBN's guidance identifies family members and close associates as common channels through which illicit funds may move, which means screening should not stop with one individual.

The screening process should also include: 

• Immediate family members: A PEP's spouse, children, parents, and siblings require the same level of scrutiny as the PEP. If you identify a PEP, you should also assess these relationships as part of your enhanced due diligence process.
• Close associates: Business partners, advisers, political allies, and other close associates may conduct transactions or hold assets linked to a PEP. Screening these relationships helps you identify risks that may not appear at the account holder level.
• Beneficial owners connected to a PEP: A company may not be a PEP, but its beneficial owner could be. When that happens, enhanced due diligence applies to the entire business relationship. This is one of the areas compliance teams most commonly miss because the risk sits behind the ownership structure rather than the customer record.

Effective PEP screening looks beyond the account holder. It also considers the people and ownership structures connected to that customer.

Why PEP Screening Matters Beyond Compliance

PEP screening is a regulatory requirement, but the consequences of getting it wrong go beyond compliance. The financial, reputational, and regulatory impact often comes from how a PEP relationship is handled after a match is identified.

The risks extend beyond the initial screening check:

• Financial exposure: Onboarding a PEP without applying enhanced due diligence (EDD) creates a documented compliance gap. That gap remains even if no money laundering is later identified because the required controls were not applied from the start.
• Reputational risk: A customer who is later linked to corruption, sanctions violations, or another public financial scandal can expose your institution to reputational damage. Documented controls help demonstrate that the relationship was managed in line with regulatory expectations.
• CBN examination findings: During an examination, the CBN looks beyond whether screening was completed. Your institution should be able to explain why a customer was or wasn't classified as a PEP and show what happened after that decision. Weak documentation can result in regulatory findings and penalties.

Identifying a PEP is only part of the process. Your institution should also be able to show that every decision was assessed, documented, and supported.

How PEP Screening Works in Practice

PEP screening is an ongoing process, not a one-time check at onboarding. Your institution should screen customers when they enter the system and continue monitoring them throughout the relationship.

A practical PEP screening process includes:

• At onboarding: Screen the customer's identity details, including their name, date of birth, nationality, and other available identifiers, against domestic and global PEP databases. Under the CBN's PEP Guidance Notes, institutions should identify and verify PEPs before providing financial services or as soon as possible afterwards.
• Ongoing monitoring: A customer's PEP status can change after onboarding. The CBN therefore requires institutions to monitor existing customers for changes in PEP status, customer profile, or account activity and update their records where necessary.
• Monthly returns to the CBN and NFIU: The CBN also requires financial institutions to submit monthly returns on transactions involving PEPs to both the CBN and the NFIU. Meeting this obligation requires more than flagging a match, it requires tracking PEP-related transactions throughout the relationship.
• Documented classification rationale: Every screening decision should have a clear record, whether the match was confirmed, dismissed as a false positive, or escalated for further review. CBN examination teams review this documentation as part of their assessment.

A PEP match is only the beginning. What your institution does next matters just as much.

What to Do When a PEP Match Comes Back

What should your institution do when a PEP match comes back? A match is not a reason to automatically reject a customer. It signals that your institution should follow a defined process, with every decision properly documented.

Once a PEP match is confirmed, your institution should:

• Apply enhanced due diligence (EDD): A confirmed PEP requires enhanced due diligence beyond standard KYC. This includes verifying the customer's source of funds, source of wealth, and the nature of the public function they hold or previously held. If a company's beneficial owner is a PEP, the same level of due diligence should apply to that ownership structure.
• Obtain senior management approval: Before establishing or continuing a business relationship with a PEP, the CBN Guidance Note requires documented approval from senior management. This approval should come from the appropriate level within your institution, in line with the CBN's guidance.
• Verify the source of funds and wealth: Looking at individual transactions is not enough. Your institution should understand both the origin of the customer's funds and the source of wealth that supports the relationship.
• Increase ongoing monitoring: Higher-risk PEP relationships require enhanced monitoring throughout the customer lifecycle. Your institution should apply closer oversight and review account activity based on the level of risk.

Not every match is confirmed. Knowing how to distinguish a true match from a false positive is just as important.

The Difference Between a True PEP Match and a False Positive

PEP databases are designed to cast a wide net, so false positives are an expected part of the screening process. The challenge is not avoiding them altogether, but handling them consistently, documenting every decision, and making sure genuine PEP matches are not overlooked.

When reviewing a potential match, look beyond the initial alert:

1. What makes a match a true positive?
A true match is one where the customer's identity details, including their name, date of birth, nationality, and other available identifiers, align with a PEP record. The more identifiers that match, the stronger the confidence. A name match on its own, especially for a common name, is not enough to confirm PEP status.

2. What does a false positive look like?
A false positive occurs when additional checks show that the customer is not the individual listed in the PEP record. The decision to dismiss the match should be supported with a documented rationale. Clearing a match without recording why can create the same examination concerns as failing to investigate it.

3. Which red flags require closer review?
The CBN Guidance Notes identify several situations that deserve additional scrutiny. These include customers who ask detailed questions about the institution's AML or PEP procedures, hesitate to provide source of funds information, provide information that conflicts with publicly available records, or repeatedly move funds to and from countries with no apparent connection to them.

False positives are not just a technology challenge. They are a process challenge, and how each one is reviewed and documented forms part of your institution's compliance record.

   PEP screening is only one part of an effective AML programme. The Trust Fabric explores how African fintechs can build compliance systems across onboarding and ongoing risk management. Download The Trust Fabric to get the full guide.

How Dojah's AML Watchlist Supports PEP Screening

The PEP screening process does not end after a customer is checked against a watchlist. Institutions still need to screen customers at onboarding, monitor them over time, and keep records of every decision made. Doing all of that manually becomes difficult as customer volumes grow.

Here's how Dojah's AML Watchlist brings the process together: 

• PEP checks from onboarding to ongoing monitoring: Dojah's AML Watchlist supports PEP screening during customer onboarding and ongoing re-screening. This helps institutions identify customers who become PEPs after the business relationship has already started.
• PEP, sanctions, and adverse media in one screening flow: Instead of running separate checks, Dojah combines PEP screening with sanctions and adverse media screening in the same workflow. This gives compliance teams a broader view of customer risk during review.
• Records that support compliance reviews: Screening outcomes are recorded, including confirmed matches, dismissed false positives, and escalated cases. Having those records available makes it easier to demonstrate how each screening decision was reached.
• Screening across Nigerian and global PEP lists: Dojah's AML Watchlist checks both domestic and international PEP databases. This supports institutions serving customers across different countries or processing cross-border transactions.

Running a PEP screening check is only part of what regulators now expect. 

 See how Dojah's AML Watchlist supports screening, ongoing monitoring, and record-keeping in one workflow. 

Frequently Asked Questions on PEP Screening in Africa Fintech

1. What is PEP screening in African fintech?

PEP screening helps African fintechs identify customers who are politically exposed persons and determine whether enhanced due diligence is required under AML regulations.

2. Does a PEP match mean a customer should be rejected?

No. A PEP match triggers a documented review process, including risk assessment and enhanced due diligence. It is not a reason to automatically decline a customer.

3. Who should be included in politically exposed persons screening in Africa?

In addition to the PEP, screening should cover immediate family members, close associates, and beneficial owners where applicable, as required by the CBN Guidance.

4. What is the difference between a true PEP match and a false positive?

Multiple identifying details support a true match, while a false positive is a match that cannot be confirmed after reviewing additional identifiers. Both outcomes should be properly documented.