The federal government has welcomed the return of Nigeria’s capital market to the global frontier-market universe next month, reversing an exclusion nearly three years ago after restrictions on foreign-exchange access and capital repatriation made the market difficult for international investors to trade.
FTSE Russell has reclassified Nigeria from “Unclassified” to “Frontier Market” status, effective at the open of trading on Sept. 21, according to a statement issued Friday and personally signed by Taiwo Oyedele, minister of finance and coordinating minister of the economy .
The decision follows improvements in foreign-exchange liquidity, capital repatriation and market accessibility, the ministry said, describing the move as recognition of reforms undertaken by President Bola Tinubu’s administration to stabilize the economy and restore investor confidence.
Nigeria was removed from FTSE Russell’s equity indexes in September 2023 after persistent difficulties faced by foreign investors seeking to execute trades and repatriate funds. The exclusion came as the country struggled with dollar shortages and a widening gap between official and parallel exchange rates, undermining confidence in its financial markets.
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The return to the frontier-market classification gives Nigeria renewed visibility among international investors that use global indexes to allocate capital across emerging and developing economies. It also provides a benchmark against which the government can measure further progress in opening the market to overseas funds.
“This is a milestone, not a destination,” Oyedele said in the statement. The government’s ambition is to build a capital market “deep, liquid and competitive enough” to achieve Emerging Market status in the near term, he said.
The reclassification comes as Nigeria seeks to attract more foreign capital to help finance economic growth while reducing its reliance on government borrowing. The country’s stock market has been among the stronger performers in recent years, although foreign participation has remained constrained by currency risks and concerns over the ability to move funds in and out of the country.
The government said the change reflects the combined efforts of financial-market regulators and operators, including the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), Nigerian Exchange Group and Central Securities Clearing System.
Their work has included regulatory changes, upgrades to market infrastructure and engagement with international investors, according to the ministry.
The government now plans to focus on increasing market liquidity, expanding investor participation and strengthening protections for shareholders as it pursues the next classification upgrade.
Nigeria’s return to the FTSE Russell frontier index also puts greater emphasis on the durability of the reforms that have improved access to foreign currency.
Investors will be watching whether those gains can be sustained as the government continues efforts to overhaul monetary policy, strengthen public finances and attract long-term foreign investment.
Oyedele said the government would continue policies designed to improve the “depth, transparency and global competitiveness” of the capital market, which it considers a key part of its broader economic transformation agenda.
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