FTSE Russell delays Nigeria's Frontier Market return over T+1 settlement concerns
FTSE Russell suspended Nigeria's planned September 2026 reclassification to Frontier Market status, citing need to assess operational impact of Nigeria's T+1 settlement cycle implemented June 1, 2026. The global index provider worries the shortened settlement window may require international institutional investors to prefund equity trades—a negative under its Settlement Cycle (DvP) criterion. Market operators argue the delay overlooks years of broader reforms including banking sector recapitalization, growing domestic institutional participation, and improved market infrastructure. They note the U.S., India, and Canada maintain T+1 settlement while retaining major index positions, suggesting implementation process—not the model itself—is the issue. FTSE Russell now expects a definitive update by end August 2026, reversing its March 2026 approval for September implementation. Operators insist Nigeria's long-term investment case remains strong despite delayed passive inflows from global funds tracking FTSE Russell Frontier Market indices, emphasizing that technical collaboration on prefunding concerns would better support capital formation than delay. With Nigeria's NGX recovering from its May 2026 all-time high of 252,508 points, stakeholders warn the postponement sends wrong signals to emerging markets about reform risks versus status quo safety.