Nigeria’s capital market has received a significant boost after S&P Dow Jones Indices (S&P DJI) placed the country on its 2027 Country Classification Watchlist for a possible upgrade from a Standalone Market to a Frontier Market.
The development comes as Bloomberg ranked Nigeria as the world’s best-performing stock market in U.S. dollar terms this year, ahead of South Korea.
According to S&P DJI, Nigeria was added to the watchlist following improvements in its regulatory framework, market transparency, enforcement and overall market integrity. While the decision does not amount to an immediate reclassification, it places the country under formal review for a potential Frontier Market upgrade during the 2027 assessment.
The index provider said Nigeria’s eligibility for reclassification will depend on sustained policy implementation and continued improvements in market operations.
The watchlist inclusion follows a series of reforms led by the Securities and Exchange Commission (SEC) in collaboration with the Nigerian Exchange Group (NGX Group), the Central Securities Clearing System (CSCS) and other capital market stakeholders. The reforms are aimed at strengthening investor protection, enhancing transparency, modernising post-trade infrastructure, improving operational efficiency and aligning Nigeria’s capital market with global best practices.
SEC Director-General, Dr. Emomotimi Agama, said the commission remains committed to building a modern and resilient capital market through faster settlement systems, tokenised securities and deeper derivatives markets.
According to him, the commission’s priority is to maintain a fair, orderly and transparent market that promotes long-term capital formation while safeguarding investors.
Reacting to the development, Group Managing Director and Chief Executive Officer of NGX Group, Temi Popoola, described Nigeria’s inclusion on the watchlist as a strong indication of growing international confidence in the country’s capital market reforms.
He said the recognition reflects the collective efforts of regulators, market operators and market infrastructure institutions to create a more transparent, efficient and globally competitive investment environment.
Meanwhile, Bloomberg reported that Nigerian equities have emerged as the world’s best-performing stock market in U.S. dollar terms this year.
The report said Nigeria’s benchmark stock index has delivered a 67 per cent return in dollar terms since the beginning of the year, narrowly outperforming South Korea’s Kospi Index, which has gained 66 per cent.
Bloomberg attributed Nigeria’s strong market performance largely to gains in financial services stocks listed on the Nigerian Exchange, with Fortis Global Insurance Plc posting an estimated 1,400 per cent return in dollar terms.
The report added that, unlike South Korea’s technology-driven rally, Nigeria’s market performance has been underpinned by domestic macroeconomic reforms, improved foreign exchange liquidity and renewed investor confidence.