Nigeria lobbies FTSE Russell after T+1 pause delays frontier upgrade
Nigerian exchange executives met FTSE Russell in London to salvage a delayed frontier market upgrade stalled by concerns over the bourse's new one-day settlement cycle.
A delegation from the Nigerian Exchange Group (NGX), led by Chairman Umaru Kwairanga, held talks in London with FTSE Russell, global custodians and institutional investors to address a roadblock in the country's market reclassification. FTSE Russell paused Nigeria's planned upgrade to Frontier Market status last month, pending a thorough assessment of its recent shift to a T+1 settlement cycle.
The shortened settlement cycle, which clears and settles trades one business day after execution, took effect last month following approval from the Securities and Exchange Commission. A senior NGX official described the London discussions as "fruitful and frank," noting that the delegation emphasized the framework was jointly developed by the industry and is operating smoothly.
Market classification is a critical driver of passive capital flows, as index-tracking funds must automatically allocate capital to countries included in FTSE Russell's benchmarks. The pause means Nigeria will miss its original September 2026 effective date for the frontier market upgrade, which was initially granted during a March 2026 interim review. FTSE Russell said it will provide a definitive update on the reclassification by the end of August 2026.
To address the hesitation, the Nigerian delegation presented new proposals aimed at further aligning the exchange's operations with international best practices under the T+1 regime. The NGX is now awaiting feedback from FTSE Russell and other stakeholders on these measures.
Despite the FTSE Russell delay, Nigeria's broader regulatory overhaul is drawing positive signals from other major index providers. S&P Dow Jones Indices recently placed Nigeria on its 2027 watchlist for a potential upgrade from "Standalone" to "Frontier" status, citing significant modernization in the regulatory environment designed to improve market transparency and integrity.
S&P Dow Jones Indices said it will monitor developments in Nigeria for the remainder of 2026 before deciding whether to approve the reclassification during its 2027 Country Classification Annual Review. The index provider warned, however, that consistent policy implementation and stronger operational resilience will be critical before any upgrade is finalized.
Public finance expert Dr. Khalid Yusuf Ahmed noted that these diplomatic efforts are essential for unlocking foreign investment. "Behind engagements like these lies something far greater than a series of meetings," Ahmed said. "They represent strategic efforts to strengthen investor confidence, enhance market credibility, improve capital flows, and reinforce Nigeria’s position within the global financial ecosystem."
