By Muhammad Sal
Global index provider FTSE Russell has added Nigeria to its Watch List for a potential upgrade from Unclassified to Frontier Market status, following improvements in the country’s foreign exchange market and capital market reforms.
This move, announced in October 2025, reflects growing international confidence in Nigeria’s market stability and regulatory environment.
The addition to the Watch List comes two years after Nigeria was removed from all FTSE global indices in 2023 due to severe foreign exchange (FX) shortages and delays that prevented foreign investors from repatriating capital.
Since early 2025, however, Nigerian authorities, led by the Central Bank of Nigeria (CBN), have implemented key reforms including exchange rate unification, FX backlog clearance, and enhanced market liquidity management.
These changes have largely eliminated FX queues and improved transparency, according to reports from investors and FTSE Russell.
FTSE Russell’s semi-annual Country Classification Review noted that Nigeria now meets the five Quality of Markets (QoM) criteria required to regain Frontier Market status, including regulatory oversight, market transparency, and clearing and settlement systems. Despite this progress, the review also shows ongoing challenges such as limited FX availability, high transaction costs, and restricted development of derivatives markets.
But Temi Popoola, Group Managing Director of the Nigerian Exchange Group (NGX), described the Watch List inclusion as “a testament to coordinated policy reforms and renewed investor optimism.” He added, “The recent reforms in the foreign exchange market, fiscal policy, and ease of doing business have collectively helped restore investor confidence and address key structural constraints.”
This development holds significant implications for Nigeria’s tech ecosystem and broader economy. Reclassification to Frontier Market status would likely attract substantial foreign portfolio inflows from institutional investors and passive funds benchmarked to FTSE indices, boosting liquidity and access to growth capital for Nigerian startups, particularly in fintech and digital innovation sectors.
According to FTSE Russell, the Watch List status allows for ongoing “in-depth engagement” with Nigerian authorities and market participants ahead of a final reclassification decision scheduled for the next review cycle. The outcome will depend on maintaining FX stability, predictable capital repatriation timelines, and verified sustainability of reforms.
As FTSE Russell continues its evaluation, Nigeria stands at a crucial juncture whereby a successful reclassification would mark a major milestone in restoring foreign investor confidence and accelerating the country’s digital economy and capital market development.
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