By Aduragbemi Omiyale
The lingering foreign exchange (FX) crisis in Nigeria has forced MSCI Incorporated to remove the country from its frontier markets category to standalone markets.
Recall that on June 22, 2023, MSCI said the feedback from market participants as part of the initial consultation conducted from June 2022 to June 2023 suggested that the limited accessibility of the Nigerian equity market would warrant the removal of the MSCI Nigeria indexes from the MSCI Frontier Markets Indexes.
However, the consultation period was extended to September 29, 2023, to allow more time for the liquidity situation in the nation’s forex market to stabilise following measures announced by the Central Bank of Nigeria (CBN) on June 14, 2023.
The firm said the market participants did not observe any significant improvements in FX liquidity during the extended consultation period, confirming that the ease of capital inflows and outflows in the MSCI Nigeria indexes was not to the standards expected from Frontier Markets.
As a result of this development, MSCI kicked out the country of the category by reclassifying the MSCI Nigeria indexes.
In order to facilitate index replicability at the time of the reclassification, MSCI will delete each Nigerian security from the MSCI Frontier Markets Indexes at a price that is effectively zero as of the close of February 29, 2024.
MSCI is a leading provider of critical decision support tools and services for the global investment community.
It was initially formed as a division of Morgan Stanley, but it became an independent company to focus on developing and managing indices that serve as benchmarks for investors worldwide.
Adedapo Adesanya 
Modupe Gbadeyanka