Director-General of SEC Emphasizes Policy Coherence in Nigerian Financial System
Emomotimi Agama, the Director-General of the Securities and Exchange Commission (SEC), has urged for enhanced policy coherence and operational resilience across Nigeria’s financial landscape. His call comes in light of the recent inclusion of Nigeria on the S&P Dow Jones Indices’ (S&P DJI) watch list for potential reclassification from a standalone market to a frontier market.
Nigeria’s Opportunity for Enhanced Global Investor Confidence
In a strategic position paper, titled “Nigeria’s Path to Index Reclassification: A Unified Strategy on Policy Coherence and Operational Resilience,” Agama emphasized that the S&P DJI listing, alongside FTSE Russell’s ongoing Frontier Markets Review, presents Nigeria with its most significant opportunity in a decade to restore global investor confidence and encourage foreign portfolio investments.
Importance of Consistent Policy Implementation
Agama highlighted the need for Nigeria to move beyond mere reform design and focus on the consistent implementation of existing policies. He noted that international index providers are looking for evidence of how well the country’s market infrastructure performs under various conditions, both normal and stressful. “The reform program is complete. Now the evidence program will begin,” he said, indicating a pivot towards showcasing the effectiveness of reforms already in place.
Positive Assessments and Operational Resilience Requirements
The SEC Director-General pointed out that S&P DJI acknowledges improvements in Nigeria’s regulatory framework, market integrity, and transparency. However, he stressed that sustained assessment will rely on the consistent implementation of policies and operational resilience through to the end of 2026. He stressed that the successful transition to a T+1 payments cycle in June 2026 further elevates Nigeria’s position relative to other frontier and emerging markets.
Risk Factors Threatening Market Classification
Agama cautioned that any shifts in policy, discretionary regulatory actions, or restrictions on foreign exchange access could jeopardize Nigeria’s chances of securing a frontier market classification. He outlined five essential pillars for policy consistency, including a sustainable foreign exchange regime, uniform regulatory enforcement, and the avoidance of retroactive policy changes.
Proposed Coordination Mechanisms for Improvement
To facilitate this process, the SEC has proposed the creation of an Index Reclassification Steering Committee, which would include key stakeholders such as the Central Bank of Nigeria, the Federal Ministry of Finance, and the Nigerian Exchange. This committee aims to produce a quarterly reclassification evidence pack, containing certified data on crucial factors such as settlement performance and market liquidity, to be submitted to S&P DJI and FTSE Russell.
Implementation Schedule for Evidence Collection
The SEC’s implementation schedule outlines the establishment of the steering committee, with an initial evidentiary report due in the third quarter of 2026. This will be followed by technical submissions to the index providers by year-end, ensuring continued engagement during the country classification review process in 2027. Agama emphasized that, if this comprehensive framework is properly executed, Nigeria’s reclassification should be based on a solid record of performance instead of advocacy, potentially regaining its frontier market status by 2027.
