NGX and CSCS leaders meet FTSE Russell to address market status concerns

A high-level delegation representing Nigeria’s capital market leadership has convened in London to conduct urgent discussions with FTSE Russell. The meetings aim to resolve outstanding concerns regarding the country’s market status after the index provider placed Nigeria’s planned reclassification to Frontier Market status under review.

The delegation, led by Umaru Kwairanga, group chairman of the Nigerian Exchange Group, includes senior leadership from the Nigerian Exchange Group and the Central Securities Clearing System. This strategic engagement follows the Nigerian market’s completion of a transition to a T+1 settlement cycle, a move that made Nigeria the first market in Africa to settle securities one business day after the trade date.

While local authorities view the shift to T+1 as a milestone in the modernization of the nation’s post-trade architecture, the transition has introduced operational friction for international asset managers. According to reporting from Businessday, these investors are struggling with trade confirmations, foreign exchange sourcing, and the alignment of global time-zone differences within the new, compressed timeline. FTSE Russell has indicated it will provide a final update on Nigeria’s index status by the end of August 2026.

The London delegation is tasked with addressing several residual gaps identified by index providers, including foreign exchange liquidity depth, custody frameworks, and transaction cost efficiencies. The discussions are seen as a critical effort to secure investor confidence and ensure that global index funds can proceed with capital allocation into Nigerian equities.

Industry observers and regulatory officials have offered differing perspectives on the impact of the T+1 transition. Emomotimi Agama, director general of the Securities and Exchange Commission, acknowledged that the compressed window places significant pressure on intermediaries, noting that the shortened interval requires heightened accuracy in liquidity forecasting and pre-funding. Agama emphasized that robust technology and a vibrant securities-lending market are essential components to support the new cycle, alongside reliable foreign-exchange accessibility.

Some market sources have suggested that the transition was complicated by a perceived lack of integration between custodian reconciliation engines and the Nigerian Exchange infrastructure. Further, these sources noted that the extension of trading hours by the Nigerian Exchange during the shift to T+1 reduced the time available for post-trade activities, potentially impacting international order flow.

Despite these challenges, some voices within the financial sector remain optimistic about the country's long-term trajectory. Gbite Oduneye, chairman of Indexa Exchange Group, stated that many institutional investors recognize the progress made in market reforms over the past year. Oduneye argued that the decision by FTSE Russell to pause the reclassification was overly cautious, contending that Nigeria has met the requirements to justify a return to Frontier Market status.

Timeline of Recent Market Developments

• November 28, 2025: The Nigerian capital market completes the migration from T+3 to T+2 settlement.
• March 2026: Nigeria is upgraded from “Unclassified” to “Frontier Market” status during an interim review.
• June 1, 2026: Nigeria transitions to a T+1 settlement cycle.
• August 2026: Expected timing for a definitive update from FTSE Russell regarding Nigeria’s index status.
• September 2026: Previously scheduled implementation date for the market’s Frontier status update.

As the August deadline approaches, the delegation’s primary objective remains the stabilization of international perceptions. The success of these meetings will determine whether the progress in market infrastructure—specifically the adoption of the T+1 framework—will be viewed by global index providers as an indicator of a more sophisticated, transparent, and accessible financial environment, or as a persistent operational hurdle for international participants. Moving forward, the focus will remain on whether these systemic overhauls can reconcile with the operational realities of global institutional investors.