FTSE Russell Halts Plan to Upgrade Nigeria to Frontier Market Status

FTSE Russell, a global provider of stock market indices and data analytics, says it has placed Nigeria’s planned reclassification to frontier market status under further review.

The global index provider disclosed development in a statement on Tuesday, citing concerns over the country’s transition to a T+1 settlement cycle, which now allows trade to settle in one day.

Nigeria transitioned from a T+2 to a T+1 settlement cycle on June 1, but the index provider said the move could effectively make the market a prefunded one for international institutional investors.

According to the statement, a pause in Nigeria’s status upgrade would allow the FTSE to examine the implications of the transition for foreign investors.

“Further to the FTSE Equity Country Classification March 2026 Interim Announcement, which confirmed the reclassification of Nigeria from Unclassified to Frontier market status from September 2026, FTSE Russell announces that the reclassification of Nigeria is under further review,” the statement reads.

“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.”

The index provider said it would provide an update on Nigeria’s potential reclassification to frontier market status by the end of August 2026.

Nigeria was downgraded to “unclassified” status in 2023 after FTSE Russell flagged persistent challenges around repatriation of funds and liquidity in the foreign exchange market.

But in its March interim review, FTSE announced that Nigeria would be reclassified from “unclassified” to “frontier market” status, with the upgrade scheduled to take effect in September 2026.

The organisation had confirmed that Nigeria had met the conditions for an upgrade from its “Unclassified” status.

An upgrade would allow Nigeria’s equities to be added to FTSE frontier indices, a development lauded by many stakeholders as a major milestone for the country’s capital market reforms, as it could potentially attract global inflows.