LAGOS, July 2 – Nigeria’s capital market community has rallied behind the country’s recently implemented T+1 settlement cycle after FTSE Russell suspended its planned reclassification of Nigeria to Frontier Market status, citing the need for additional assessment of the reform’s operational impact.
The global index provider announced the postponement on Tuesday, stating that it requires more time to evaluate how Nigeria’s migration to a T+1 settlement cycle, where securities transactions are settled one business day after execution, affects market operations.
The decision has drawn criticism from market participants, who argue that the focus on a single operational issue overlooks years of regulatory, technological and structural reforms aimed at strengthening Nigeria’s capital market and aligning it with international best practices.
Stakeholders had viewed the migration to T+1 settlement as a significant milestone in improving market efficiency and supporting Nigeria’s anticipated return to FTSE Russell’s Frontier Market Index. Instead, they say the delay risks overshadowing broader progress made in enhancing the country’s investment ecosystem.
Among the strongest critics was Chief Blakey Ijezie, founder of Okwudili Ijezie & Co. (Chartered Accountants), who questioned whether the postponement accurately reflects Nigeria’s overall market quality.
According to Ijezie, “FTSE Russell ought to be encouraging Nigeria to do better, not punishing the country for trying to modernise. T+1 is not some reckless experiment; it is the direction the entire world is moving in. America did it. India did it. If Nigeria is penalised for following the same global trend that FTSE itself considers best practice elsewhere, then the message to other frontier and emerging markets is that reform is risky and the status quo is safer. That is the wrong incentive to send.”
He also criticised the timing of the decision, stating, “Nigeria was told in March that reclassification was coming in September. Now, barely weeks to that date, after the country has already gone through the disruption of changing its entire settlement infrastructure, FTSE comes back to say it needs more time. If they had concerns about T+1’s compatibility with Frontier status, that should have been flagged before the March decision, not after Nigeria had already implemented the change. You cannot ask a country to climb the mountain and then move the summit.”
While acknowledging FTSE Russell’s concerns over pre-funding requirements, Ijezie argued that collaboration would be more constructive than postponement.
“I am not saying FTSE Russell’s technical concern about prefunding is illegitimate. It is a real operational question that deserves an answer. But an index provider serious about supporting frontier market development should be working hand-in-hand with Nigeria’s regulators to solve that problem, not simply parking the decision and walking away until August. Encouragement and partnership build markets. Delay and ambiguity discourage the very capital formation FTSE claims to care about,” he said.
Sehinde Adenagbe, Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), said the strength of any capital market depends on the effectiveness of its entire ecosystem rather than a single operational metric.
According to Adenagbe, “A strong capital market is built on the effectiveness of its ecosystem, the ability of market participants, institutions and infrastructure providers to work together in creating a seamless environment for capital formation and investment.”
He added that “The success of Nigeria’s recent banking sector recapitalisation exercise is a reflection of the growing capacity of the market to support large-scale transactions and connect businesses with the capital required for growth.” He further noted that accessibility, transparency, sound corporate governance, effective regulation and the professionalism of market operators collectively determine the resilience and depth of a capital market.
Tajudeen Olayinka, Chief Executive Officer of Wyoming Capital & Partners, argued that Nigeria’s expanding domestic institutional and retail investor base has become an important source of market stability, reducing dependence on foreign portfolio investment during periods of global market volatility.
Similarly, David Adonri, Vice President of Highcap Securities Limited, said market quality should be assessed using a broader set of indicators, including liquidity, regulatory oversight, technological infrastructure, transparency and investor participation, rather than relying on a single operational criterion.
Meanwhile, Ambrose Omordion, Chief Operating Officer of InvestData Consulting Limited, described the migration to T+1 settlement as a long-term infrastructure reform that is expected to improve market efficiency, transparency and resilience once the market fully adjusts to the new settlement framework.
The debate highlights the differing perspectives on how frontier markets should be assessed as they modernise their financial infrastructure. While FTSE Russell continues its review, Nigerian market participants maintain that the country’s broader reforms should carry greater weight in evaluating its readiness for Frontier Market classification.
