WED JULY 01 2026-theGBJournal| Nigeria’s anticipated return to the FTSE Russell Frontier Market Index has been delayed after the global index provider placed the country’s reclassification under further review, extending uncertainty over a decision closely watched by international investors.
The move comes as FTSE Russell evaluates whether Nigeria’s newly implemented T+1 settlement cycle meets the operational and accessibility requirements of global institutional investors, with a final decision now expected by the end of August.
FTSE Russell said on Tuesday that it had suspended its planned reclassification of Nigeria to Frontier Market status to allow for a more comprehensive assessment of the country’s transition to a T+1 settlement regime, under which securities transactions are completed one business day after they are executed instead of the previous settlement cycle.
The review follows Nigeria’s efforts to strengthen the efficiency of its capital markets and align its post-trade infrastructure more closely with international standards.
A shorter settlement cycle is generally viewed as reducing counterparty and settlement risks while improving market efficiency, although it also requires investors, custodians and brokers to adapt their operational processes.
Analysts tells theG&BJournal that, the decision means the country will remain outside FTSE Russell’s Frontier Market Index for at least another two months, postponing a potential catalyst for renewed foreign portfolio inflows.
Nigeria was removed from the index in 2024 after persistent foreign exchange liquidity constraints and restrictions on capital repatriation undermined investor confidence.
Market participants had expected the recent improvements in foreign exchange liquidity, exchange rate reforms and broader capital market reforms to pave the way for the country’s reinstatement.
The adoption of T+1 settlement was widely regarded as another important milestone in modernising the Nigerian market.
However, FTSE Russell’s latest decision suggests the index provider wants additional evidence that the new settlement framework functions smoothly for international institutional investors before changing Nigeria’s market classification.
“The review is not considered a rejection of Nigeria’s bid for reinstatement,”‘ according to source.
“Rather, it reflects FTSE Russell’s cautious approach to ensuring that operational changes do not create unintended barriers for global investors, particularly large asset managers whose investment mandates depend on predictable market infrastructure and settlement efficiency,” he adds.
A successful reclassification would be significant because many passive investment funds and institutional investors benchmarked to FTSE Russell’s Frontier Market Index allocate capital based on index membership.
Re-entry could therefore enhance Nigeria’s visibility among global investors, improve liquidity in the domestic equity market and potentially attract fresh foreign portfolio investment over time.
The delay, however, may temper near-term expectations of immediate index-driven inflows, with investors likely to await FTSE Russell’s final assessment before increasing exposure.
Analysts nevertheless view the additional review as a technical evaluation rather than a reversal of Nigeria’s reform progress, leaving open the possibility of reinstatement once the T+1 settlement framework has demonstrated consistent operational effectiveness.
FTSE Russell said it expects to communicate its final decision on Nigeria’s Frontier Market classification by the end of August 2026.
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