FTSE Russell halts plan to upgrade Nigeria to frontier market status

Global index provider FTSE Russell has placed Nigeria’s planned reclassification to frontier market status under further review, raising concerns about the country’s recent transition to a T+1 settlement cycle.

In a statement released on Tuesday, June 30, FTSE Russell said it wants to assess how the new settlement system could affect international institutional investors before proceeding with the planned upgrade.

Nigeria officially moved from a T+2 to a T+1 settlement cycle on June 1, meaning equity trades are now settled within one business day instead of two. However, FTSE Russell said the shorter settlement period could effectively require foreign institutional investors to prefund their equity transactions, a factor considered negative under its market quality assessment.

“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 said.

The index provider explained that mandatory prefunding could impact one of its key market quality requirements. “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. 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 said it expects to provide an update on Nigeria’s classification by the end of August 2026. Nigeria was downgraded to “Unclassified” status in 2023 due to concerns over foreign exchange liquidity and the ability of investors to repatriate funds.

In March 2026, FTSE Russell announced plans to restore Nigeria to frontier market status, confirming that the country had met the requirements for an upgrade, with implementation initially scheduled for September 2026. A return to frontier market status would allow Nigerian equities to rejoin FTSE frontier market indices, a move widely expected to boost investor confidence and attract increased foreign portfolio investment into the country’s capital market.