Nigeria is pushing to regain its place in major MSCI and JPMorgan investment indices after securing a return to the FTSE Russell Frontier Market Index, marking a fresh effort to rebuild the country’s standing among international investors.
The Securities and Exchange Commission has confirmed that reinclusion in the two global benchmarks is now a target, following improvements in foreign exchange liquidity and investors’ ability to move capital out of the Nigerian market.
The renewed push comes after FTSE Russell approved Nigeria’s return to frontier market status, reversing an earlier downgrade linked to difficulties faced by foreign investors in repatriating funds.
Brandspur Banking News Desk reports that the FTSE development provides an important test of whether reforms introduced since the overhaul of Nigeria’s foreign exchange system in 2023 can translate into a sustained recovery in foreign portfolio investment.
Emomotimi Agama, Director-General of the Securities and Exchange Commission, said the regulator is working towards Nigeria’s reinclusion in both the MSCI and JPMorgan indices, describing the effort as part of the progress being recorded in the country’s capital market.
Nigeria’s path back to the benchmarks follows years of disruption caused by foreign exchange shortages and currency controls. MSCI downgraded Nigeria from its Frontier Markets Index to Standalone Market status in 2024 after concluding that foreign exchange liquidity constraints had significantly affected the accessibility of the equity market to international institutional investors.
JPMorgan’s exclusion dates further back. Nigeria was removed from the JPMorgan Government Bond Index-Emerging Markets in 2015 amid concerns over currency controls and investors’ ability to conduct foreign exchange transactions.
Those exclusions reduced Nigeria’s visibility among global funds whose investment decisions are guided by international market benchmarks.
Recent developments have strengthened the government’s case for a return. Nigeria moved towards a market-driven foreign exchange system in 2023, while improved dollar liquidity has helped ease the backlog of foreign exchange obligations that previously complicated capital repatriation.
FTSE Russell’s decision indicates that Nigeria now satisfies the five Quality of Markets criteria required for its frontier classification, including improved foreign exchange availability and the absence of material delays affecting international institutional investors seeking to repatriate capital.
A successful return to MSCI and JPMorgan benchmarks could carry wider implications for Nigerian equities and government bonds. Inclusion makes assets more visible to international fund managers and allows investment products tracking the indices to allocate capital to the Nigerian market.
Emerging-markets strategist Charlie Robertson has also pointed to the potential significance of index membership, recalling that Nigeria’s inclusion in a major bond benchmark in 2012 had been expected to attract about $1 billion in investment flows.
Attention is also turning to the expected listing of Dangote Petroleum Refinery, scheduled for September 14, as Nigeria seeks to deepen its capital market and strengthen its appeal to domestic and international investors.
While FTSE reinclusion represents an important milestone, Nigeria’s return to the MSCI and JPMorgan indices will ultimately depend on whether improvements in foreign exchange liquidity, market accessibility and capital repatriation can be maintained over time.
