The planned reclassification of Nigeria’s Frontier Market status by FTSE Russell has suffered a major setback.
This is because the global index provider is reviewing this after the country transitioned into a T+1 settlement cycle on June 1, 2026, from a T+2 settlement cycle.
Last month, Nigeria became the first market in Africa to implement the shortened settlement framework designed to enhance efficiency, reduce risk, and improve global competitiveness.
The move, according to the Securities and Exchange Commission (SEC), was to align the ecosystem with global best practices, where shorter settlement cycles are increasingly being adopted to improve post-trade efficiency, reduce counterparty risk, and strengthen investor confidence, reaffirming regulators’ commitment to continued modernisation of market systems and processes.
The Director General of SEC, Mr Emomotimi Agama, had enthused that, “The era of T+1 has begun. In just six months, Nigeria has successfully progressed from T+2 to T+1 settlement, joining a growing group of markets embracing faster and more efficient settlement cycles.
“This achievement signals that Nigeria is prepared to undertake the structural reforms required to compete for global capital.”
However, FTSE Russell seems not to buy into this development, as it raised concerns about it, pointing out that the shorter settlement period could effectively make the Nigerian market a prefunded market for international institutional investors, requiring them to provide funds before trades are completed.
It argued that compulsory pre-funding is considered a disadvantage under its Settlement Cycle (Delivery versus Payment) criterion, one of the five key Quality of Markets standards that countries must satisfy to qualify for Frontier Market status under its Equity Country Classification framework.
The platform said it would conduct a further assessment before taking a final decision on the proposed reclassification and would provide an update by the end of August 2026.
Nigeria was upgraded from Unclassified to Frontier Market status in March 2026, with the change initially scheduled to take effect in September.