Global index provider FTSE Russell is expected to proceed with Nigeria’s reclassification from ‘Unclassified’ to ‘Frontier Market’ status, with a formal announcement anticipated later this week.

According to Nairametrics, sources familiar with the development said the announcement is expected to resolve uncertainty surrounding Nigeria’s planned return to the Frontier Market classification.

The reclassification was initially approved during FTSE Russell’s interim review in March 2026 and is scheduled to become effective when trading opens on September 21, 2026.

The planned move follows a period of additional scrutiny after FTSE Russell placed Nigeria’s upgrade ‘under further review’ in June. The review came after the Nigerian capital market moved from a T+2 to a T+1 settlement cycle on June 1, 2026.

FTSE Russell had expressed concern that the shorter settlement period could effectively make Nigeria a prefunded market for international institutional investors.

Under the index provider’s ‘Quality of Markets’ criteria, the requirement for investors to prefund equity trades is considered negative under the ‘Settlement Cycle (DvP)’ metric. The metric is one of five core standards used in determining Frontier Market status.

The Securities and Exchange Commission (SCE), however, later clarified that foreign portfolio investors are not required to prefund their accounts.

SEC stated that transactions settled through the Central Securities Clearing System (CSCS) are completed at 5:00 p.m. on T+1 while remaining subject to the standard Delivery versus Payment framework.

Nigeria had previously been removed from FTSE Russell’s Frontier Market indices in September 2023. The decision followed persistent challenges encountered by international investors in repatriating capital and carrying out foreign exchange transactions.

FTSE Russell subsequently recognised improvements in Nigeria’s foreign exchange market, including the clearing of FX backlogs. Those developments were acknowledged when the index provider approved Nigeria’s return to Frontier Market status earlier this year.

Market analysts had anticipated that the reclassification could attract increased foreign portfolio inflows and strengthen Nigeria’s visibility among global emerging and frontier market funds.

Source Leadership.ng