Nigeria needs to maintain policy consistency and strengthen operational resilience as the country seeks to regain Frontier Market status following its placement on the S&P Dow Jones Indices (S&P DJI) 2027 Watchlist.
The Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, said this in a strategy and position paper titled ‘Nigeria’s Path to Index Reclassification: A Unified Strategy on Policy Consistency and Operational Resilience.’
He described the S&P DJI watchlist placement, alongside an ongoing Frontier Market review by FTSE Russell, as Nigeria’s biggest opportunity in a decade to rebuild global investor confidence and attract increased foreign portfolio investment.
He said Nigeria had moved beyond designing reforms, adding that international index providers are now assessing whether existing policies are implemented consistently and whether the country’s market infrastructure performs reliably under both normal and stressed conditions.
According to Agama, “the reform programme is complete; the evidence programme now begins,” stressing that the country’s priority should be to demonstrate the effectiveness of reforms already implemented rather than introduce new measures.
He noted that S&P DJI acknowledged improvements in Nigeria’s regulatory environment, transparency, enforcement and market integrity, but said the country’s performance during the observation period through the rest of 2026 would determine whether it qualifies for reclassification.
Agama also said FTSE Russell’s parallel review was partly triggered by Nigeria’s successful migration to a T+1 settlement cycle in June 2026, placing the country ahead of many frontier and several emerging markets in settlement efficiency.
Although both index providers use different assessment methodologies, he explained that they are evaluating the same core issues, including foreign exchange repatriation, settlement integrity, regulatory consistency and infrastructure reliability.
The SEC Director-General warned that policy reversals, discretionary regulatory actions, retroactive directives or restrictions on foreign exchange access could weaken Nigeria’s chances of securing Frontier Market status.
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He said global index providers expect Nigeria to demonstrate the durability of its foreign exchange regime, consistent regulatory enforcement, the absence of retroactive policy changes, strong coordination among fiscal, monetary and regulatory authorities, and predictable enforcement of investor rights through the judicial system.
On market operations, Agama said Nigeria must sustain strong performance under its T+1 settlement regime, ensure efficient foreign exchange repatriation, maintain deep and liquid foreign exchange markets, strengthen market infrastructure, support orderly trading during periods of volatility and deliver consistent performance throughout the observation period.
To coordinate the process, the SEC plans to establish an Index Reclassification Steering Committee comprising the Commission, the Central Bank of Nigeria, the Federal Ministry of Finance, the Federal Inland Revenue Service, the Nigerian Exchange, the Central Securities Clearing System and FMDQ.
The Commission also intends to publish a quarterly Reclassification Evidence Pack containing certified data on settlement performance, foreign exchange repatriation timelines, market liquidity, system resilience, regulatory enforcement and dispute resolution for submission simultaneously to S&P DJI, FTSE Russell and MSCI.
Agama further disclosed that the SEC would engage global custodian banks before the third-quarter 2026 survey to address operational concerns ahead of their assessments.
He also cautioned against actions that could derail the review process, including foreign exchange restrictions during periods of market stress, uncoordinated fiscal or tax measures, infrastructure failures and adverse feedback from global custodians.
According to the implementation timeline outlined in the paper, the SEC will establish the steering committee and issue its first evidence report in the third quarter of 2026, followed by technical submissions to S&P DJI and FTSE Russell before year-end and sustained engagement throughout the 2027 country classification review.
Agama added that if the framework is fully implemented, Nigeria’s reclassification would be based on “an unbroken, independently certified record of performance” rather than advocacy, positioning the country to regain Frontier Market status in 2027.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X