Lagos, Nigeria — Following the recent pause of FTSE Russell’s planned reclassification of Nigeria’s stock market to Frontier Market status, Standard & Poor’s (S&P) has taken a contrasting stance.
The global index provider has placed Nigeria on its 2027 watchlist for possible reclassification from its current Standalone status to Frontier Market. This decision is underpinned by regulatory reforms aimed at enhancing market transparency, integrity, and accessibility. Nigeria’s regulatory environment has seen modernization efforts that S&P acknowledges as positive.
However, the index provider also emphasizes the need for consistency in policy application and operational resilience to secure this upgrade.
The evaluation of Nigeria’s market is ongoing, with S&P set to review developments through the end of 2026 before finalizing its decision during the 2027 Country Classification Annual Review.
The regulatory reforms come at a time when Nigerian authorities have been working to rebuild investor confidence, focusing on reforms in the foreign exchange market, settlement infrastructure, market regulation, and capital market operations. These efforts have been aimed at reversing the trend of foreign portfolio investors’ retreat from the country. S&P’s placement of Nigeria on the 2027 watchlist could signify a critical step towards global indices like MSCI, which would, in turn, facilitate greater access by international investors and potentially lead to increased capital inflows.
The reclassification to Frontier Market status is widely viewed as an endorsement of market accessibility and regulatory credibility. While the FTSE Russell suspension of Nigeria’s reclassification focused on the practical implications of the country’s transition from a T+2 to a T+1 settlement cycle, S&P’s decision reflects a broader assessment of Nigeria’s regulatory improvements.
The FTSE is expected to provide its final decision by the end of August 2026, following its evaluation of the impact of the new settlement cycle on international investors.
As Nigeria awaits these evaluations, the nation’s financial market continues to evolve, with reforms and regulatory changes aimed at improving liquidity and attractiveness.
The outcome of both S&P Dow Jones Indices’ and FTSE Russell’s evaluations will be crucial in determining Nigeria’s path towards becoming a Frontier Market, a move that could significantly impact the country’s economy and its standing in the global financial community.
*Additional reporting by ImNews | Sources consulted: 5*
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This original article was produced by the ImNews editorial team
Source: Africa.businessinsider
Source: Ayodeji Adegboyega
