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🇳🇬 Nigeria /Economy & Trade

Nigerian Capital Market Leads Africa with T+1 Settlement Cycle Transition

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Outcome reported
  • The Nigerian capital market has successfully transitioned to a T+1 settlement cycle, becoming the first in Africa to adopt this faster system.
  • This move aligns Nigeria with global markets like the US and Canada, enhancing efficiency and reducing risk in securities transactions.
  • The Securities and Exchange Commission (SEC) is already planning for a further transition to same-day (T+0) settlement.

The Nigerian capital market has achieved a significant milestone by transitioning to a T+1 settlement cycle, a move that positions it as a leader in Africa. This adoption means that securities transactions on the Nigerian Exchange Limited (NGX) will now settle one business day after trading, a substantial improvement over the previous T+2 framework.

The United States, Canada and Mexico transitioned to T+1 settlement on the weekend of 25–27 May 2024. India had already implemented T+1 in a phased approach since 2022 and 2023. The European Union, the United Kingdom, and Switzerland have now announced plans to adopt T+1 in October 2027.

— Dr. Emomotimi AgamaHighlighting the global trend towards T+1 settlement.

This accelerated settlement process is designed to enhance market efficiency, reduce counterparty risks, and improve Nigeria's global competitiveness in attracting international capital. Dr. Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC), highlighted that this transition places Nigeria among markets representing approximately 60 percent of global market capitalization that have already embraced shorter settlement cycles. He noted that countries like the United States, Canada, and Mexico recently moved to T+1, while India has been implementing it since 2022 and 2023. European markets are set to follow suit in October 2027.

The financial world is embracing T+1 rapidly, and what was once considered advanced is quickly becoming the baseline expectation for any market serious about competing for international capital.

— Dr. Emomotimi AgamaExplaining the increasing global adoption of T+1 settlement.

Agama emphasized the direct benefit for retail investors, stating, "What does that mean for a retail investor in Lagos, Kano, or Port Harcourt who sells shares today? It means their cash is available tomorrow. Not in two days. Not in three. Tomorrow." This rapid access to funds is expected to boost liquidity and investor confidence. The SEC has not stopped at T+1; it has already begun planning for an even faster same-day settlement (T+0), signaling Nigeria's ambition to remain at the forefront of financial market innovation.

What does that mean for a retail investor in Lagos, Kano, or Port Harcourt who sells shares today? It means their cash is available tomorrow. Not in two days. Not in three. Tomorrow.

— Dr. Emomotimi AgamaIllustrating the direct benefit of T+1 settlement for retail investors.

Umaru Kwairanga, Chairman of NGX Group, echoed these sentiments, assuring investors of improved efficiency and a better experience. He stated, "If you buy today, your account will be debited tomorrow. If you sell today, you will get payment tomorrow." This transition reinforces the Nigerian market's standing as one of the most efficient globally and demonstrates a commitment to continuous improvement in the financial sector.

If you buy today, your account will be debited tomorrow. If you sell today, you will get payment tomorrow.

— Umaru KwairangaDescribing the practical implications of the T+1 settlement for investors.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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