Global index provider FTSE Russell has placed Nigeria’s planned reclassification to Frontier Market status under further review, citing the need to assess the impact of the country’s transition to a shortened securities settlement cycle on international investors.
The organisation disclosed this in a statement on Tuesday obtained by The News Chronicle, saying it would announce a final decision on Nigeria’s potential return to Frontier Market status by the end of August 2026.
Nigeria had been scheduled to regain Frontier Market status following FTSE Russell’s March 2026 interim review, with the reclassification initially set to take effect in September 2026.
However, the index provider said the recent shift in Nigeria’s equity market from a T+2 to a T+1 settlement cycle, which took effect on June 1, 2026, required further evaluation.
Under the T+1 system, securities transactions are cleared and settled one business day after execution, replacing the previous two-day settlement cycle.
Explaining its decision, FTSE Russell said the new arrangement could effectively make Nigeria a prefunded market for international institutional investors.
The statement read, “From 01 June 2026, the Nigerian equity market transitioned from a T+2 to T+1 settlement cycle, which could result in Nigeria becoming a de facto prefunded market for international institutional investors.
“A requirement to prefund equity trades is deemed a negative for the ‘Settlement Cycle (DvP)’ criterion, which is one of the five core FTSE Quality of Markets criteria required for attaining Frontier market status within the FTSE Equity Country Classification scheme.
“Consequently, the reclassification of Nigeria is under further review to assess the implications of the transition to a T+1 settlement cycle for international institutional investors. FTSE Russell will provide an update on the status of Nigeria’s potential reclassification to Frontier market status by the end of August 2026.”
FTSE Russell’s review will determine whether Nigeria meets the market accessibility requirements necessary for inclusion in its Frontier Market index, a benchmark closely monitored by global institutional investors.
