Nigeria has officially initiated discussions to rejoin the JPMorgan Government Bond Index for Emerging Markets (GBI-EM) as major foreign exchange reforms begin to take effect.
Patience Oniha, the director-general of the Nigeria Debt Management Office (DMO), revealed this development at the Nigeria Investor Forum held on the sidelines of the International Monetary Fund and World Bank Spring Meetings in Washington DC.
The decision to rejoin the JPMorgan Index is part of Nigeria’s efforts to restore trust with international investors, while demonstrating its commitment to economic reforms and transparency.
Oniha emphasized that Nigeria now meets the eligibility criteria for inclusion, stating, “With the recent reforms in the foreign exchange market, we believe Nigeria meets the criteria to rejoin the index.”
Oniha, along with Olayemi Cardoso, the Central Bank of Nigeria Governor, highlighted the naira’s stability and rising investor confidence.
This optimism is supported by Fitch’s recent upgrade of Nigeria’s long-term foreign-currency rating to ‘B’ from ‘B-‘, signalling renewed investor confidence.
Nigeria was initially included in the JPMorgan Index in 2012. However, it was placed on a negative watchlist before being officially removed in 2015 due to concerns over transparency and liquidity issues.
The JPMorgan GBI-EM is a key benchmark used by investors to track the performance of local currency-denominated government bonds in emerging markets.
It includes only countries that are accessible to most international investors, and inclusion in the GBI-EM is crucial for emerging markets, as it boosts foreign investment and enhances access to capital markets.
