Nigeria has been placed on the 2027 country classification watchlist by S&P Dow Jones indices (S&P DJI) for possible reclassification from a standalone market to a frontier market, in recognition of reforms in its capital market.

S&P DJI disclosed this in its annual country classification watchlist on Thursday, stating that the decision reflected improvements in Nigeria’s regulatory environment, transparency and market integrity.

 The index provider, however, noted that the watchlist inclusion did not constitute an immediate upgrade but rather placed Nigeria under formal review for possible reclassification in 2027.

According to the S&P DJI, Nigeria’s regulatory environment has been modernised to improve transparency, enforcement and market integrity.

 It noted that sustained policy implementation and operational resilience would be key factors in determining whether the country qualifies for Frontier Market status during the 2027 review.

The development comes amid ongoing reforms in Nigeria’s capital market, spearheaded by the Securities and Exchange Commission (SEC), in collaboration with the Nigerian Exchange Group (NGX Group), the Central Securities Clearing System (CSCS), and other stakeholders. 

The reforms aim to strengthen investor protection, enhance market transparency, improve operational efficiency, modernise post-trade infrastructure and align the market with international best practices. 

Reacting to the development, the director-general of the SEC, Dr Emomotimi Agama, said the commission remains committed to building a transparent, efficient and globally competitive capital market.

Mr Agama said the commission’s reform agenda focuses on developing a forward-looking market capable of supporting intelligent investing through faster settlement systems, tokenised securities, and deeper derivatives markets. 

“At the SEC, our priority is to sustain a fair, orderly and transparent market that protects investors and supports long-term capital formation. 

“We will continue to work with exchanges, market infrastructure institutions, operators and other stakeholders to strengthen policy consistency, enforcement, market integrity and operational resilience,” he said. 

Also commenting, the group MD of NGX Group, Temi Popoola, said the inclusion on the watchlist is an encouraging development for the nation’s capital market. 

He said the decision reflected growing international confidence in the ongoing market reforms and the collective efforts of regulators, market infrastructure institutions and operators. 

According to Mr Popoola, although the watchlist inclusion is not yet a reclassification, it validates the progress recorded in improving market transparency, accessibility and efficiency.

He said the priority remained sustaining the reform momentum by deepening market liquidity, improving accessibility, strengthening investor confidence, and positioning Nigeria as a preferred destination for both domestic and foreign investment. 

Meanwhile, the S&P DJI noted that while Nigeria had made significant progress, the final decision on its reclassification would depend on continued policy consistency and operational resilience. 

It added that inclusion on the watchlist marked the first stage of a structured review process that could enhance Nigeria’s visibility among global institutional investors.

It will also improve its eligibility for frontier market benchmark indices and investment products if eventually reclassified.

(NAN)