FTSE Russell Restores Nigeria to Frontier Market Status After Three-Year Exit

• Reclassification takes effect from opening of trading on Sept 21, 2026  

•City Boy Movement describes re-entry as measurable evidence of economic progress, commends CBN, SEC for investor confidence gains

• Capital market operators welcome reclassification  

•Oyedele: economy remains stable, growth to exceed 4% in 2026, NEC moves to cut high interest rates

Deji Elumoye, James Emejo in Abuja Kayode Tokede and  Sunday Ehigiator in Lagos

Nigeria is set to reclaim its place in the global investment map as international index provider, FTSE Russell, announced moves to restore the country to its Frontier Market classification, ending a three-year period in which the Nigerian market was designated “Unclassified”.

The reclassification, which is scheduled to take effect from the opening of trading on September 21, 2026, represents a reversal of the downgrade imposed on Nigeria in 2023 following persistent concerns over Foreign Exchange (FX) liquidity and the ability of international investors to repatriate funds from the country.

City Boy Movement (CBM) and capital market operators welcomed the development, which they described as positive for the economy.

Relatedly, Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, declared that the country’s economy remained stable, assuring that Gross Domestic Product (GDP) will exceed four per cent by the end of the year.

Oyedele who briefed newsmen after the monthly meeting of the National Economic Council (NEC) on Thursday in Abuja, said the country had achieved significant macroeconomic stability. But he stressed that the next challenge was translating the gains into shared prosperity.

FTSE Russell had in March 2026 confirmed Nigeria’s return to Frontier Market status after determining that the country had met the five Quality of Markets criteria required under its classification framework.

It had stated that market participants reported the clearing of FX backlogs and an end to material delays faced by international institutional investors seeking to repatriate capital.

The latest development followed a period of uncertainty after FTSE Russell in June placed the planned reclassification under further review following the country’s transition from a T+2 to a T+1 settlement cycle.

The global index provider had raised concerns that the shorter settlement period could effectively make Nigeria a prefunded market for international institutional investors, an arrangement considered negative under its Delivery versus Payment criterion.

However, Securities and Exchange Commission (SEC) subsequently clarified that foreign portfolio investors were not required to prefund their accounts, while trades cleared and settled through Central Securities Clearing System remained subject to the standard Delivery versus Payment framework.

SEC had introduced the T+1 settlement regime from June 1, 2026, as part of efforts to modernise the Nigerian capital market, improve efficiency, and align the market with international standards.

With the concern addressed, the planned reclassification is now set to proceed, effectively restoring Nigeria to a market category from which it was removed in September 2023.

FTSE Russell’s 2023 decision followed prolonged difficulties in Nigeria’s foreign exchange market, particularly the inability of international institutional investors to execute FX transactions and repatriate investment proceeds at rates that could support the replication of FTSE index changes.

At the time, FTSE Russell said the lack of liquidity in the Investors’ and Exporters’ FX Window was adversely affecting international investors and had resulted in the suspension of index changes involving Nigerian equities since September 2022. Nigeria was subsequently removed from the Frontier Market indices effective September 18, 2023.

The return, therefore, marked a significant turnaround in the conditions that had previously undermined Nigeria’s standing among international portfolio investors.

Reacting to the development, City Boy Movement (CBM), a youth advocacy organisation, described the reclassification as an important validation of the economic reforms being implemented by the administration of President Bola Tinubu.

Director-General of the movement, Hon. Francis Shoga, said the development was particularly significant when viewed against the foreign exchange and capital repatriation challenges inherited by the administration.

“When our grand patron, President Bola Tinubu, took office, Nigeria’s foreign exchange market was under severe pressure, with billions of dollars in investor funds trapped in the country,” Shoga said.

According to Shoga, the latest assessment by FTSE Russell that FX queues had been cleared and international institutional investors were no longer experiencing significant delays in repatriating their capital amounts to measurable evidence of progress.

He said, “Three years on, FTSE Russell reports that FX queues have cleared, and international institutional investors no longer face significant delays in repatriating their capital. Nigeria is re-joining the global investment benchmark after being removed.

“That is measurable progress, independently assessed by one of the world’s leading index providers.”

Shoga commended SEC, Central Bank of Nigeria (CBN), and other capital market stakeholders for their contributions towards improving the functioning of the financial market and rebuilding investor confidence.

He said the development should, nevertheless, not be interpreted as the end of the reform process, stressing that the ultimate test remains the extent to which improved macroeconomic and financial conditions would translate into better welfare for Nigerians.

“There is still work to be done, particularly in ensuring that these gains translate into better living standards for Nigerians but we should still acknowledge progress when independent global institutions recognise it,” he said.

The CBM DG also called on state governments to complement the reforms at the federal level by increasing investments in human capital and social development, particularly given Nigeria’s large youthful population.

He said the return to the FTSE Frontier Market classification should be seen as an opportunity to consolidate investor confidence, deepen the capital market, and attract productive investment capable of supporting employment and economic growth.

Shoga said, “On behalf of the City Boy Movement, we commend President Bola Tinubu for staying the course, appreciate the SEC, CBN and capital market stakeholders for their contributions, and congratulate Nigerians on this important milestone.”

The reclassification is expected to restore Nigeria’s eligibility for the relevant FTSE Frontier Market indices, although the broader impact on capital flows will ultimately depend on investor appetite, market liquidity, and the sustainability of the reforms underpinning the country’s improved market accessibility.

Two major capital market stakeholders, Chartered Institute of Stockbrokers (CIS) and Association of Securities Dealing Houses (ASHON), commended FTSE Russell over the reclassification.

The 14th President and Chairman of Council, Chartered Institute of Stockbrokers (CIS), Dr. Fiona Ahimie, stated that the country’s return to Frontier Market status should, over time, be a positive development for foreign portfolio investment, as it restores the country’s visibility and eligibility within the FTSE Russell global index framework.

Ahimie stated that the immediate impact should not be overstated, stressing that reclassification does not automatically translate into a significant surge of foreign capital.

She explained, “Rather, it places Nigerian equities back on the radar of global frontier-market investors and gives index-tracking funds the opportunity to consider Nigerian stocks within their investment universe.

“This is particularly significant because Nigeria was moved to Unclassified status in 2023, largely due to challenges around foreign exchange liquidity and capital repatriation, which made it difficult for international investors to enter and exit the market efficiently.”

She stated that for the domestic market, the more meaningful benefits could emerge gradually through improved liquidity, broader investor participation, and stronger valuations.

Ahimie explained that increased foreign participation could boost trading activity and potentially reduce the valuation discount attached to Nigerian equities, especially large and liquid stocks that are more accessible to international investors.

She stated, “Nevertheless, the reclassification should be regarded as a catalyst, not a cure-all. Sustained foreign inflows will ultimately depend on Nigeria’s ability to maintain adequate FX liquidity, facilitate the efficient repatriation of investment capital, ensure policy consistency, deepen the capital market and achieve greater macroeconomic stability.

“In other words, Frontier Market status reopens the door to international capital, but the quality of the investment environment will determine how many investors ultimately walk through it.” 

For his part, Chairman, ASHON, Sehinde Adenagbe, said the return to Frontier Market status was significant because it enhanced the international visibility and credibility of the Nigerian capital market.

Adenagbe stated, “It signals that some of the market-access concerns that previously limited Nigeria’s participation in global investment indices are being addressed. This could encourage international fund managers, institutional investors and research analysts to pay greater attention to Nigerian equities.

“Over time, increased visibility can improve price discovery, deepen market participation and strengthen the ability of Nigerian companies to attract international capital through the equities market.”

Adenagbe said the latest development could strengthen Nigeria’s position within the global capital-market ecosystem.

He said, “Greater foreign participation would potentially increase market liquidity, broaden the investor base and improve the efficiency of capital allocation. It could also encourage Nigerian listed companies to improve corporate governance, disclosure and investor-relations practices as they compete for international capital.” 

Adenagbe stated that the long-term significance would depend on whether Nigeria could sustain the reforms that underpinned market accessibility, particularly foreign liquidity, capital repatriation, regulatory predictability, and macroeconomic stability.

“The reclassification, therefore, represents an important vote of confidence, but its full value will be realised only if the market can convert renewed global attention into sustained investment and deeper liquidity.”

Oyedele: Economy Remains Stable, Growth to Exceed 4% in 2026, As NEC Moves to Cut Interest Rates, Spur Economy

Oyedele said the economy had stabilised, and the task ahead was how to convert economic stability to shared prosperity.

The minister said real GDP growth stood at 3.89 per cent in the first quarter of 2026, compared with 3.13 per cent a year earlier, while growth for the full year was projected to exceed four per cent.

He explained that headline inflation declined to 15.43 per cent at the end of July, from 24.94 per cent a year earlier, although food inflation remained elevated at 20.31 per cent, against 26.2 per cent in the corresponding period last year.

Oyedele said external reserves had risen to $51.96 billion, their highest level since January 2009, and 38 per cent higher year-on-year.

He added that the naira had appreciated by 13.5 per cent year-on-year by the end of the first half of 2026, with the exchange rate now below N1,400 to the dollar and showing relative stability.

The minister said net Federation Account Allocation Committee revenues rose by 44 per cent, from N15.2 trillion in 2024 to N21.9 trillion in 2025, and were projected to increase by at least another 50 per cent in 2026.

He also reported that Nigeria’s trade surplus had nearly doubled from N17.7 trillion in 2025 to N34.7 trillion by the first quarter of 2026.

According to Oyedele, total public debt remained below 37 per cent of GDP at N159.28 trillion, while the debt-service-to-revenue ratio declined from nearly 100 per cent in 2022 to below 60 per cent in 2025.

He said improvements in the economy had also received international recognition, citing upgrades of Nigeria’s sovereign credit ratings by Fitch, Moody’s and S&P between April 2025 and May 2026. He described this as the first coordinated alignment by the three major rating agencies in more than a decade.

Oyedele stated that Nigeria exited the Financial Action Task Force grey list in October 2025 and European Union’s Anti-Money Laundering and Countering Financing of Terrorism deficiency list in January 2026, developments he said would reduce the cost and friction associated with cross-border capital flows.

The minister also said the spread between United States Treasury bonds and Nigeria’s Eurobonds had narrowed to a historic low of less than 200 basis points, while the Nigerian capital market emerged among the world’s best performers, with market capitalisation almost doubling within one year.

He described the recent reclassification of Nigeria by FTSE Russell from unclassified status to frontier market status as another major positive development capable of opening the country to a broader pool of global institutional capital.

Explaining the significance, Oyedele said many international institutional investors were restricted by investment classifications and could not deploy capital in countries outside approved categories.

He stated, “So when FTSE Russell says they’ve now reclassified Nigeria to frontier markets, that automatically makes us eligible for investment.

“Or, put differently, we become investable to many institutional investors globally.”

He said the Nigerian capital market had returned more than 60 per cent in dollar terms over the past year, notwithstanding a recent correction, adding that the new classification could attract both foreign portfolio and foreign direct investments.

Oyedele also disclosed that Thursday’s NEC meeting directed the consideration of fiscal and monetary policy measures to moderate high interest rates, particularly for priority sectors of the economy, as part of efforts to accelerate growth, investment, and job creation.

The council, chaired by Vice President Kashim Shettima, expressed concern that prevailing lending rates remained a major constraint to businesses and the real sector despite improvements in key macroeconomic indicators.

Oyedele said the council extensively reviewed the state of the economy and agreed on the need to translate the gains from recent reforms and macroeconomic stability into stronger growth and improved living standards for Nigerians.

He stated, “Council expressed concern about the high rates of interest, particularly for businesses, and directed that we look at fiscal and monetary policy measures to moderate these interest rates.”

He said agriculture, energy, manufacturing, mining and the digital economy were identified as priority sectors requiring greater attention to accelerate economic growth and tackle poverty and inequality.

Oyedele explained that NEC was particularly concerned about sectors employing the majority of Nigerians, stating that 81.4 per cent of the population work in agriculture and non-tradable services.

The minister said the council’s position was that faster growth in sectors where most Nigerians earned their livelihoods would have a more direct impact on poverty reduction and narrowing inequality.

Equally briefing newsmen, Akwa Ibom State Governor Umo Eno disclosed the balances in key federation accounts as of August 26, 2026.

Eno put Excess Crude Account balance at $535,823, Stabilisation Account at N90,950,700,556, and Natural Resources Account at N256,403,837,937.

He said the figures presented by the finance minister showed an improvement over the corresponding period last year and reinforced NEC’s assessment that the economy was stabilising, although more work remained.

Borno State Governor, Professor Babagana Zulum, said NEC also considered a presentation by Minister of Industry, Trade and Investment on the forthcoming Creative Africa Nexus Weekend, CANEX WKND 2026, and Intra-African Trade Fair scheduled for Lagos in November.

Zulum said the council endorsed the federal government’s request for active participation by all state governments and agreed that participation should be mandatory because the events would provide a platform to showcase Made-in-Nigeria products and the country’s growing local production capacity.

He said Nigeria had recorded considerable growth in local content and domestic production over the years but had not sufficiently showcased those gains to international markets.

The governor stated that the Lagos events would offer the federal government and states an opportunity to promote Nigerian products, attract international attention, and position the country more strongly within the African and global economy.

Governor Lucky Aiyedatiwa of Ondo State said NEC also received an update on the rehabilitation of 13 police training institutions across the country.

Aiyedatiwa stated that contracts had been awarded for the rehabilitation works, with about 80 per cent of contractors already receiving their award letters.

He said the rehabilitation was expected to be completed within three weeks to prepare the institutions for the commencement of police training programmes, while efforts were being intensified to secure the release of funds for the contractors to mobilise to site.

Aiyedatiwa said the council considered improved police training critical to the fight against insecurity, irrespective of ongoing considerations around state policing.

He said minimum training standards must be maintained across the police system, with adequate infrastructure and equipment at the training institutions.