FTSE Russell Proposes Nigeria's Market Reclassification

FTSE Russell proposed to reclassify Nigeria from its current frontier market status, effective September 21, 2026. This decision has been welcomed as overdue recognition of the progress made in Nigeria's capital market.

However, market observers express cautious optimism, arguing that the decision by the global index provider is not solely driven by market fundamentals. FTSE Russell's halt on Nigeria's return to frontier market status is attributed to the introduction of mandatory pre-funding for equity transactions through a central securities clearing system and a new T+1 settlement cycle.

Critics argue that this decision misguides the assessment of Nigeria's financial reforms, which aim to strengthen market resilience and efficiency. The reforms include mandatory pre-funding to reduce settlement failures and enhance investor confidence.

Despite improvements in Nigeria's foreign exchange market, concerns about currency risk and the impact of regulatory changes on foreign investment persist.