Nigeria Seeks Re-Entry into JP Morgan Bond Index

Nigeria is in advanced discussions with JP Morgan to regain its position in the Government Bond Index, a move aimed at restoring investor confidence.

Speaking at a Nigerian Investors’ Forum held alongside the World Bank and International Monetary Fund Spring Meetings in Washington, D.C., the Director-General of the Debt Management Office (DMO), Patience Oniha, highlighted the country’s recent economic improvements.

Oniha noted that Nigeria has received favorable credit assessments from rating agencies, largely due to reforms initiated by the Central Bank of Nigeria.

Recent Credit Upgrades

Fitch Ratings recently upgraded the Long-Term Issuer Default Ratings of several Nigerian banks and financial institutions from ‘B-’ to ‘B’, citing a stable outlook. The affected institutions include:

• Access Bank Plc
• Zenith Bank Plc
• United Bank for Africa Plc
• Guaranty Trust Bank Limited
• Guaranty Trust Holding Company Plc
• First HoldCo Plc
• First Bank of Nigeria Ltd
• Fidelity Bank Plc
• Bank of Industry Limited

The upgrades followed Nigeria’s sovereign credit rating improvement, reflecting increased confidence in the government’s commitment to economic reforms. These reforms include exchange rate liberalization, monetary policy tightening, and the removal of fuel subsidies.

Background on JP Morgan Index Removal

Nigeria was removed from the JP Morgan index in 2015 due to concerns over its monetary policies and foreign exchange controls. At the time, the country introduced currency restrictions to stabilize the naira, which led to liquidity challenges for foreign investors.

JP Morgan had previously warned Nigeria to ensure a functional foreign exchange market that allowed investors to conduct transactions smoothly.

Potential Re-Entry and Market Impact

Nigeria was initially listed in JP Morgan’s emerging government bond index in 2012 after the central bank removed restrictions on foreign investors exiting government bonds.

Oniha confirmed that discussions with JP Morgan have gained momentum, driven by the stability created by recent foreign exchange 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 stated.

Rejoining the JP Morgan Government Bond Index would signal renewed investor confidence and could open doors to significant investment inflows into Nigeria’s financial markets.