The Debt Management Office of Nigeria has confirmed that discussions are currently underway to re-admit the country to JP Morgan’s local currency emerging market debt index.
This was disclosed by Patience Oniha, Director-General of the Debt Management Office (DMO), during the recently concluded Spring Meetings of the International Monetary Fund (IMF) in Washington, D.C.
This development is expected to catalyze renewed foreign investment in the nation’s local currency bond market. Rejoining the JP Morgan Government Bond Index would not only signal renewed investor confidence but also unlock access to billions in passive foreign investment. It’s seen as a global vote of confidence in Nigeria’s recent efforts to liberalize and stabilize its foreign exchange market, an area that once led to the country’s exclusion.
Oniha confirmed that talks with JP Morgan were ongoing and had gained traction on the back of Nigeria’s FX market reforms. “With all the reforms that have taken place, particularly around FX, we have started engaging JP Morgan again to get back into the index. We think we are eligible now,” she said.
She acknowledged that Nigeria’s exclusion stemmed from issues like illiquidity and exit restrictions for investors but highlighted that the new FX policies have improved transparency and functionality in the market.
A successful return to the index would also reflect positively on the Central Bank’s ongoing efforts to restore order in the FX market through unified exchange rates, enhanced liquidity, and more transparent pricing structures.
