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The Securities and Exchange Commission (SEC) has called for sustained policy consistency and operational resilience following the decision by S&P Dow Jones Indices (S&P DJI) to place Nigeria on its 2027 Watchlist for possible reclassification from a Standalone Market to a Frontier Market.
In a strategy and position paper titled “Nigeria’s Path to Index Reclassification: A Unified Strategy on Policy Consistency and Operational Resilience,” the Director-General of the SEC, Dr. Emomotimi Agama, said Nigeria’s prospects for securing the reclassification would depend on consistent implementation of existing reforms and the reliability of the country’s market infrastructure throughout the review period.
He said the S&P DJI decision, alongside an ongoing Frontier Market review by FTSE Russell, presents an opportunity for Nigeria to regain global investor confidence and attract increased foreign portfolio investment, but noted that international index providers are now focused on evidence of policy implementation rather than the introduction of additional reforms.
“The reform programme is complete; the evidence programme now begins,” Agama said.
According to him, S&P DJI acknowledged improvements in Nigeria’s regulatory environment, transparency, enforcement and market integrity, but indicated that the country’s assessment would depend on policy consistency and operational resilience during the observation period extending through the remainder of 2026.
Agama said FTSE Russell’s parallel review was triggered partly by Nigeria’s migration to a T+1 settlement cycle in June 2026. Although the two index providers use different methodologies, he said they are assessing similar indicators, including foreign exchange repatriation, settlement integrity, regulatory consistency and infrastructure reliability.
He warned that policy reversals, discretionary regulatory actions, retroactive directives or restrictions on foreign exchange access could weaken Nigeria’s chances of obtaining Frontier Market status.
Agama identified five areas requiring policy consistency: durability of the foreign exchange regime, uniform regulatory enforcement, avoidance of retroactive policy changes, coordination among fiscal, monetary and regulatory authorities, and predictable enforcement of investor rights through the judicial system.
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He said Nigeria would need to demonstrate sustained performance under the T+1 settlement regime, efficient foreign exchange repatriation, resilient market infrastructure, orderly trading during periods of market volatility and consistent performance throughout the observation period.
To coordinate the process, the Commission proposed the establishment of an Index Reclassification Steering Committee comprising the SEC, the Central Bank of Nigeria, the Federal Ministry of Finance, the Federal Inland Revenue Service, Nigerian Exchange, Central Securities Clearing System and FMDQ.
The SEC also plans to prepare 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 to S&P DJI, FTSE Russell and MSCI.
Agama said the Commission would engage global custodian banks before the third-quarter 2026 survey to address operational concerns before feedback is submitted to the index providers.
He cautioned against foreign exchange restrictions during periods of market stress, uncoordinated fiscal or tax measures, infrastructure failures and adverse feedback from global custodians, warning that such developments could affect Nigeria’s reclassification prospects.
According to the implementation timeline contained in the paper, the SEC intends to establish the steering committee and issue the first evidence report in the third quarter of 2026, followed by technical submissions to S&P DJI and FTSE Russell before the end of the year, with continued engagement through the 2027 country classification review.
Agama said if the framework is implemented as proposed, Nigeria’s reclassification would be based on “an unbroken, independently certified record of performance” rather than advocacy.
