S&P Dow Jones Indices has placed Nigeria on its 2027 watchlist for reclassification as a “Frontier” market, citing regulatory reforms aimed at improving transparency, market integrity, and accessibility as the criteria for the ratings initiative.
The global index provider, in a Notice released on Wednesday, stated that for exercise it would monitor developments in Nigeria for the remainder of 2026 before deciding whether to reclassify the country from its current “Standalone” status to “Frontier” during its 2027 Country Classification Annual Review.
According to the S&P DJI, Nigeria’s regulatory environment has gone through significant modernization designed to improve market transparency, enforcement, and integrity in the past few years.
The Notice partly stated: “The Nigerian regulatory environment has modernized to improve transparency, enforcement, and market integrity.
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“While these reforms are intended to support a structurally more accessible market, consistency in policy application and operational resilience are required for reclassification” it added
To this end, the S&P stated Nigeria would remain under close observation throughout the rest of the year before a final decision is taken in 2027.
By global standards, the global index provider’s latest watch-listing of Nigeria for Frontier Market signals growing international recognition of reforms in Nigeria’s capital market.
For instance, a return to Frontier Market status will improve Nigeria’s visibility among global institutional investors that benchmark their portfolios against frontier market indices, and by implication boost investment flows into Nigerian equities from funds that track frontier market benchmarks, while reinforcing confidence in the country’s capital market reforms.
Nigeria is currently classified as a Standalone market by S&P DJI, a category reserved for markets that do not fully meet the criteria for inclusion in either frontier, emerging, or developed market indices.
It would be recalled that the global index provider removed Nigeria from its Select Frontier Index and reclassified the nation’s capital market to “Standalone” status on November 1, 2023, citing accessibility issues experienced in Nigeria by international investors for the country’s removal from the category.
Specifically, S&P DJI attributed its decision partly to the Central Bank of Nigeria’s (CBN’s) issuance of new guidelines, claiming that the guidelines are causing delays in capital repatriation and preventing international investors from exiting their Nigerian positions.
It stated then: “Despite the efforts by Nigerian authorities to address the market liquidity issues in the foreign exchange market, and the significant delays in capital repatriation, these measures are yet to represent a short or even medium-term solution for market participants.”
The latest watch-listing of Nigeria for Frontier Market Index by the global index provider is coming barely a week after FTSE Russel, another global index provider, suspended its initial plans to reclassify Nigeria as a frontier market this September due to what it termed recent development in the nation’s capital market.
