Nigeria has ushered in a new era for its capital market with the adoption of the T+2 settlement cycle, effective from November 28. This landmark shift shortens the window for trade settlements from several days to just two business days, marking a pivotal advancement in the nation’s financial infrastructure and showcasing its dedication to global standards.
With this modernized system, market liquidity is set to improve, operational risks will diminish, and Nigeria becomes more attractive to foreign portfolio investors seeking efficient markets. The T+2 framework places Nigeria on par with major international markets, enhancing the overall trading experience for investors by ensuring quicker access to both funds and securities, and enabling market operators to execute trades with greater agility.
The successful rollout of this initiative was the result of close cooperation between the Central Securities Clearing System Plc (CSCS), the Securities and Exchange Commission (SEC), and a host of other financial market players. According to the CSCS, the transition represents one of the most significant infrastructure reforms the market has seen in nearly 20 years.
Under T+2, trades executed on any given day are fully settled within two business days. For example, a transaction carried out on Monday is concluded by Wednesday, with the buyer receiving securities and the seller obtaining payment. This expedited process reduces the window for default risk and makes the market more dynamic.
Industry leaders have lauded this transition. Emomotimi Agama, Director General of the SEC, underscored the regulator’s commitment to aligning Nigeria with evolving global norms, noting the journey from manual certificates to today’s digital and efficient processes. Agama emphasized that a robust technological backbone and stricter surveillance measures have prepared the market for this change, and that the reform is crucial for bolstering investor confidence and reducing counterparty risks.
Temi Popoola, chairman of CSCS and CEO of NGX Group, described the migration as more than a technical overhaul—it is a strategic move towards a transparent and competitive market that meets international investor expectations. He credited months of thorough preparation for the smooth transition, which supports Nigeria’s ambition to expand its economy and introduce sophisticated financial products.
Haruna Jalo-Waziri, CEO of CSCS, highlighted the importance of the SEC’s 10-Year Capital Market Master Plan and recent upgrades in technology infrastructure as key enablers. He sees the market’s readiness for T+2 as a springboard toward even faster settlement standards, such as T+1 and eventually real-time processing.
Collectively, these reforms reflect a broader commitment to efficiency, resilience, and international competitiveness. By embracing the T+2 settlement cycle, Nigeria is not only modernizing its financial markets but also signaling its resolve to stand shoulder-to-shoulder with leading global economies in the realm of post-trade operations.
