Nigeria Moves to T+2 Settlement Cycle, Eyes T+1 Transition to Boost Market Efficiency
Nigeria’s capital market has taken a historic step forward by officially transitioning to a T+2 settlement cycle, effective November 28, 2025. The move, announced by the Securities and Exchange Commission (SEC), aims to enhance market efficiency, reduce risks, and align Nigeria with global post-trade standards. Market operators and investors alike welcomed the development, seeing it as a major milestone in modernizing the country’s financial ecosystem.
At a press conference marking the transition, SEC Executive Commissioner Bola Ajomale reflected on the challenges of earlier trading days when settlements could take weeks and investors often waited months to receive stock certificates. “It was a very interesting time,” he recalled, noting that the shift to T+2, and the eventual move to T+1, represents a dramatic improvement in operational speed and market reliability. CSCS CEO Haruna Jalo-Waziri added that the transition had been years in the making, citing global interest and scrutiny at international custodians’ forums.
A settlement cycle is the time between a trade and when payment or securities exchange is completed. T+2 means trades are settled two business days after execution. Globally, markets are increasingly shortening settlement periods to reduce costs, improve liquidity, and lower counterparty risk. While the US and Canada already operate on T+1 cycles, Europe plans a 2027 transition. Nigeria’s shift now positions it alongside the BRVM in West Africa and ahead of the Johannesburg Stock Exchange, which still runs a T+3 cycle.
Technology and strategic investment played a key role in the transition. CSCS leveraged major system upgrades, including IBM Power 10 solutions, to ensure a seamless move at minimal cost, representing less than 5% of its annual revenue. Jalo-Waziri emphasized that the move strengthens investor confidence, liquidity, and competitiveness, noting that younger investors will soon benefit from a trading experience more aligned with instant online purchases and returns.
Looking ahead, the Nigerian capital market is already eyeing a T+1 settlement cycle, potentially as early as May 2026. The transition to T+2 is more than a technical upgrade—it is a strategic signal of Nigeria’s commitment to efficiency, transparency, and global competitiveness. With robust risk management systems, stakeholder engagement, and support channels in place, investors can expect faster, safer, and more predictable trade settlements, laying the groundwork for deeper liquidity and broader market participation.
source: punch