11 Years After, Nigeria Returns to JP Morgan’s Global Bond Index

• New index covers 26 markets, with Nigeria attracting 7.4% weighting  

Leading global investment banker, JP Morgan, has included Federal Government of Nigeria (FGN) bonds in its freshly launched Government Bond Index–Emerging Markets Edge (GBI-EM Edge), relaunching the country into the bank’s bond benchmark after 11 years.

The development came days before FTSE Russell’s reclassification of Nigeria from Unclassified to Frontier market status, effective September 21, 2026, after the index provider concluded that the West African country had met the required market-accessibility criteria.

FGN bonds were first included in the J.P. Morgan GBI-EM in 2012, and attracted substantial foreign investment into the domestic securities market. But the country exited the GBI-EM Global Diversified Index in 2015 amid foreign exchange liquidity squeeze.

The global investment banking giant announced Nigeria’s re-entry into the bond market via its Global Index Research report yesterday.

JP Morgan’s GBI-EM Edge is a benchmark which, tracks local-currency government debt across 26 frontier emerging markets.

Nigeria entered the index with a 7.40 per cent weighting, one of the highest among participating countries and close to J.P. Morgan’s maximum country weighting of eight per cent.

The benchmark includes $17.47 billion worth of eligible Nigerian government bonds across 16 instruments, with the securities recording an average yield to maturity of 17.1 per cent, an average duration of 3.38 years and a B- Sovereign credit rating.

The Nigerian allocation is among the larger country weights in the GBI-EM Edge. Countries like Vietnam, Egypt, Morocco, Pakistan, Bangladesh, and Kazakhstan attracted the maximum eight per cent weighting, while Sri Lanka weighted 7.5 per cent.

Kenya has a 6.91 per cent weighting, followed by Tunisia at 5.32 per cent, and Uganda at 4.84 per cent. Frontier African markets collectively account for 44.5 per cent of the index, compared with 31.5 per cent for Asian markets.

Overall, the GBI-EM Edge tracks about $328 billion in local-currency government debt across 425 instruments, 26 markets and 24 currencies.

JP Morgan said the expansion of the benchmark reflected the growing importance of frontier local-currency debt markets, as well as improvements in bond issuance, auction processes, post-trade infrastructure, and access for foreign investors.

Nigeria’s inclusion in global bond index is expected to attract about $17.5 billion into the country’s debt market and lower bond yields by up to 200 basis points.

Welcoming the new development, the Federal Ministry of Finance, in a statement yesterday, said Nigeria’s inclusion was a reflection of growing investor confidence in Nigeria’s economic reforms, particularly the stabilisation of the naira, clearance of the foreign exchange backlog, stronger growth in gross domestic product (GDP), and easing inflation.

The ministry stated that Nigeria met the index’s eligibility criteria on two major fronts: liquidity, with FGN bonds actively traded under a Two-Way Quote System, and issuance size, with outstanding bond volumes exceeding the minimum threshold of $250 million per tenor.

It recalled that Nigeria’s initial inclusion in the GBI-EM in 2012 attracted substantial foreign investment into the domestic bond market, lowered borrowing costs by about 200 basis points, and boosted capital inflows into the equities and banking sectors while strengthening external reserves.

The new GBI-EM Edge tracks about $328 billion in local-currency government debt globally.

According to the ministry, index-tracking investment funds are expected to rebalance their portfolios in line with Nigeria’s weighting, creating additional foreign portfolio inflows into the domestic bond market over time.

The ministry said increased foreign institutional demand for FGN bonds was expected to support bond prices, reduce domestic yields gradually, and help lower the federal government’s cost of servicing naira-denominated debt.

Although the benchmark focused on mid-to-long-term government bonds, the government expected improved liquidity in the FGN bond market to spill over into other segments of Nigeria’s debt market, including Treasury Bills.

Reacting to Nigeria’s re-entry to JP Morgan bond index, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, was also quoted to have said the inclusion was an independent validation of Nigeria’s ongoing economic reforms.

Oyedele stated, “This inclusion is a clear, independent endorsement of the discipline behind President Bola Ahmed Tinubu’s reform agenda. It reflects the confidence international capital markets now place in Nigeria’s economic management, and it lowers the cost of financing our development priorities.

“We remain focused on the work still required to earn full reinstatement in JP Morgan’s flagship index.”

Oyedele reaffirmed government’s commitment to sustaining macroeconomic reforms and strengthening investor confidence, as it worked toward regaining full membership in J.P. Morgan’s flagship emerging markets bond index.

JPMorgan stated in a report, “The GBI-EM Edge (EDGE) is the latest addition to the GBI-EM suite of indices tracking the performance of local-currency denominated government debt from frontier economies. The index tracks the performance of ~$328 billion in debt across 425 instruments spanning 26 markets and 24 currencies, and is characterised by markets with high nominal carry and gradually improving access for international investors.

“Looking ahead, the index is less about finding the next high yielder and more about defining the Frontier beta, in a rules-based approach that recognizes the realities of real-world frictions — convertibility, settlement, and taxation — without stripping out the very risk premia investors are looking to access.”

Commenting on the EDGE, it described it as “most comprehensive local-currency benchmark of its kind, greatly increasing the breadth of relative coverage in one of the fastest growing segments in EM fixed income — since inception total eligible issuance has grown almost 6x to $ 328 billion from $ 56 billion”.

JPMorgan stated, “Lower correlation to US Equities, US Treasuries, High Grade and High Yield Corporate bonds, relative to other mainstream EM fixed income benchmarks (i.e., EMBI, CEMBI, GBI-EM). Greater representation to frontier Africa (44.5per cent) and Asia (31.5per cent) alongside lower per country exposures of 8per cent.”

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