Nigeria is actively engaged in advanced discussions to rejoin the JP Morgan Government Bond Index before the end of 2025, a strategic move that reflects the country’s push to restore global investor trust in its foreign exchange (FX) and debt markets.
This initiative follows a series of monetary and fiscal reforms introduced by the Central Bank of Nigeria (CBN) aimed at enhancing transparency and liquidity in the foreign exchange (FX) landscape.
The announcement was made by Patience Oniha, the Director-General of the Debt Management Office (DMO), during an investor dialogue hosted by the Ministry of Finance and the Central Bank of Nigeria (CBN) at the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, D.C.
Why Rejoining the Index Matters
Inclusion in the JP Morgan Government Bond Index is a key benchmark for emerging markets. It often unlocks passive investment inflows from global asset managers whose portfolios track such indices. Nigeria’s re-entry could open the door to billions of dollars in foreign investment, significantly improving liquidity in the local debt market and enhancing the naira’s stability through increased foreign exchange inflows.
In 2015, Nigeria was removed from the index due to concerns from foreign investors over a lack of market transparency, illiquidity, and capital repatriation hurdles, particularly as the country tightened currency controls amid declining oil revenues. The decision marked a sharp decline in investor confidence, shrinking Nigeria’s visibility in global capital markets.
A Changed FX Landscape
Oniha confirmed that Nigeria has resumed conversations with JP Morgan, citing substantial improvements in the country’s FX policies as a catalyst for the renewed dialogue. “We believe the market reforms, especially around FX, have positioned us well for re-entry,” she noted. According to her, these changes include a more market-reflective exchange rate system and greater transparency in monetary operations.
Industry insiders, while optimistic, emphasized that several structural conditions still need to be met before Nigeria can achieve full re-inclusion. A significant focus is being placed on the liquidity and depth of the local bond market. If the current reform momentum is sustained, Nigeria could re-enter the index formally by year-end, potentially attracting an estimated $2 billion in near-term portfolio inflows from institutional investors.
Historical Context and Challenges
Nigeria first entered the JP Morgan Government Bond Index in 2012, following the establishment of a more active and investor-friendly bond market. However, in 2015, Nigeria was placed on the index’s watch list due to increasing foreign exchange (FX) restrictions, low liquidity, and poor transparency. These challenges culminated in its eventual removal in September 2015.
The situation further deteriorated in 2022 when JP Morgan downgraded Nigeria’s emerging market debt status from “overweight,” citing rising macroeconomic risks, dwindling FX reserves, and unsustainable fuel subsidies. Earlier in April 2025, J.P. Morgan again flagged Nigeria, advising investors to reduce exposure to Nigerian Open Market Operation (OMO) bills, highlighting fiscal vulnerabilities amid falling oil revenues and global uncertainties.
What Rejoining Means for the Economy
A return to the JP Morgan index could serve as a strong endorsement of Nigeria’s economic direction. It would validate the CBN’s policy reforms aimed at unifying exchange rates, boosting market transparency, and reducing the naira’s volatility. Additionally, re-entry may help lower borrowing costs for the government by attracting low-cost foreign capital.
Furthermore, inclusion in the index would enhance Nigeria’s profile among global investors, giving the country a much-needed credibility boost at a time when external financing is becoming increasingly competitive for emerging markets.
