Global index provider FTSE Russell has placed Nigeria’s planned reclassification to Frontier Market status under further review, citing the need to assess the impact of the country’s new trade settlement cycle on international investors.
The organisation announced on Tuesday that it would conduct a detailed evaluation of Nigeria’s transition from a T+2 to a T+1 settlement cycle, under which equity trades are cleared and settled one business day after execution.
FTSE Russell said it would provide a final decision on Nigeria’s potential return to Frontier Market status by the end of August 2026.
Nigeria had initially been scheduled to regain Frontier Market status during FTSE Russell’s March 2026 interim review, with the reclassification expected to take effect in September 2026.
However, the latest review has been deferred to allow the index provider to determine how the shortened settlement cycle affects foreign institutional investors.
According to FTSE Russell, Nigeria officially adopted the T+1 settlement cycle on June 1, 2026.
The organisation explained that the new arrangement could effectively make Nigeria a prefunded market for international institutional investors.
Under a prefunded market structure, foreign investors may be required to provide funds before executing equity transactions, a condition that could reduce market attractiveness.
FTSE Russell noted that pre-funding requirements are considered a negative factor under its “Settlement Cycle (Delivery versus Payment)” assessment, one of the five key Quality of Markets criteria used in determining Frontier Market eligibility.
The index provider said the ongoing review would focus on evaluating whether the new settlement framework creates operational challenges for international investors.
It added that the outcome of the assessment would determine whether Nigeria proceeds with its planned return to the Frontier Market index.
The review represents a temporary pause in Nigeria’s expected reclassification rather than a cancellation of the process.
Market participants have closely monitored the country’s efforts to regain Frontier Market status, as inclusion in the index is expected to improve Nigeria’s visibility among global institutional investors and potentially attract increased foreign portfolio investment.
FTSE Russell’s final decision, expected before the end of August, is likely to influence investor sentiment toward Nigeria’s equity market ahead of the planned September implementation date.
