J.P. Morgan has included selected Federal Government of Nigeria bonds in its newly introduced Government Bond Index–Emerging Markets Edge, assigning Nigeria a 7.40% weighting.
The index tracks local-currency government debt across frontier emerging markets and covers 26 countries.
The Federal Ministry of Finance, in a statement issued in Abuja on Monday, said the inclusion reflected improvements in Nigeria’s economic conditions, including naira stabilisation, the clearance of foreign exchange backlogs, and broader gains in economic growth and inflation management.
Nigeria qualified for inclusion based on the liquidity of its Federal Government bonds and the size of outstanding issuances. The bonds are actively traded under a two-way quote system, while outstanding volumes per tenor reportedly exceed the index’s minimum requirement of $250 million.
Nigeria’s 7.40% weighting is among the highest allocations in the index and is close to J.P. Morgan’s maximum country weighting of 8%.
The inclusion marks Nigeria’s return to a J.P. Morgan benchmark more than a decade after the country exited the bank’s Government Bond Index–Emerging Markets Global Diversified index in 2015. The earlier removal was linked to foreign exchange liquidity constraints.
The ministry said the new index tracks approximately $328 billion in local-currency government debt globally. Nigeria’s allocation represents roughly $17.47 billion in eligible Federal Government debt across 16 instruments.
It said index-tracking funds are expected to adjust their portfolios to reflect Nigeria’s weighting, potentially increasing foreign portfolio inflows into the domestic bond market over time.
The ministry also said increased foreign institutional demand could support bond prices, gradually reduce domestic yields and help moderate the government’s cost of servicing naira-denominated debt.
Although the index focuses on mid- to long-term government bonds, the ministry said improved liquidity in the Federal Government bond market could have wider benefits for other debt instruments, including Nigerian Treasury Bills.
Federal Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described the inclusion as an independent endorsement of the government’s economic reform agenda.
“This inclusion is a clear, independent endorsement of the discipline behind President Bola Ahmed Tinubu’s reform agenda,” Oyedele said.
He added that the development reflected increased confidence in Nigeria’s economic management and could lower the cost of financing the country’s development priorities.
Oyedele, however, said more work was required to secure Nigeria’s full reinstatement in J.P. Morgan’s flagship index.
Federal Government bonds were first included in the J.P. Morgan emerging-market bond index in 2012. The finance ministry said the earlier inclusion attracted foreign investment, reduced the cost of issuance by approximately 200 basis points, opened the equities and banking sectors to foreign capital, and supported external reserves.
The Federal Government said it remained committed to sustaining its reform agenda and strengthening investor confidence in the domestic market.
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