Nigeria has slipped two places to eighth in the 2026 Absa Africa Financial Markets Index, despite foreign exchange reforms and efforts to strengthen its capital market.
The country scored 63 points, down from 65 in the previous year’s recalculated ranking, as weaknesses in foreign exchange arrangements and market transparency weighed on its performance. Ghana moved up four places to sixth with a score of 64, overtaking Nigeria.
The index, published by the Official Monetary and Financial Institutions Forum (OMFIF) in partnership with Absa Group, assesses how well African countries develop financial markets that attract investment, mobilise domestic savings and provide businesses with alternatives to bank financing.
Twenty-one of the 29 countries assessed improved their scores in 2026, while the average score rose to 56, its highest level in the index’s 10-year history.
South Africa retained the top position with 85 points, followed by Mauritius with 77 and Namibia with 71. Uganda ranked fourth, while Kenya placed fifth.
Foreign Exchange Reforms Have Yet to Resolve Market Challenges
Nigeria’s foreign exchange framework was the biggest drag on its performance, with its score in the index’s foreign exchange category falling by eight points to 70.
The report acknowledged reforms introduced since 2023, including the unification of foreign exchange windows, clearance of a $7 billion backlog, interest-rate increases and the phasing out of fiscal-style interventions.
However, it found that stronger external reserves and improved liquidity had not been matched by sufficient progress in foreign exchange arrangements and reporting.
Nigeria’s foreign exchange score declined despite receiving full marks for reserve adequacy and maintaining relatively high liquidity.
The findings suggest that improvements in reserves and currency performance alone are insufficient without a predictable framework for foreign exchange transactions and transparent market information.
Naira Recovery Has Not Fully Improved Dollar Access
Nigeria’s currency has strengthened in 2026 following earlier depreciation after the foreign exchange reforms of 2023 and 2024.
Data from African Markets showed that the naira was the second-best-performing currency among 17 African currencies against the dollar as of October 13, gaining nearly 8 per cent year-to-date.
The Central Bank of Nigeria’s external reserves also rose to about $55 billion, providing a larger buffer against external shocks.
Despite these gains, businesses continue to report difficulties obtaining foreign exchange. The Manufacturers Association of Nigeria identified inadequate dollar supply among the challenges confronting manufacturers in the second quarter of 2026.
The association also reported that businesses continued to face multiple taxes and levies imposed by different collectors and regulators.
These challenges highlight the gap between stronger headline economic indicators and the practical conditions businesses face when sourcing foreign currency for imports, raw materials and equipment.
Capital Market Reforms Have Yet to Deepen Participation
Nigeria has introduced several measures to expand investment opportunities, including the Investments and Securities Act 2025, a commercial paper trading platform and banking-sector recapitalisation.
By April 1, 2026, 33 banks had met the new capital requirements, raising ₦4.7 trillion, equivalent to $3.1 billion. Domestic investors provided about 72.6 per cent of the funds, while international sources accounted for 27.5 per cent, with the slight excess over 100 per cent due to rounding.
The Securities and Exchange Commission also approved 83 registrations by six issuers worth ₦1.3 trillion during the first nine months of the year.
However, Nigeria’s market-depth score declined by one point to 56. The index noted that trading remained concentrated in a relatively small number of large companies, while government borrowing accounted for a significant share of market activity.
This concentration limits investment options and reduces the ability of capital markets to provide broad-based financing for businesses.
Pension Funds Remain Concentrated in Government Securities
Nigeria’s pension industry also faces challenges in diversifying investments.
According to the index’s 2024 data, bills and bonds accounted for 74 per cent of Nigerian pension assets. Cash and deposits represented 12 per cent, equities accounted for 11 per cent, while other investments made up the remaining 3 per cent.
The report attributed the limited diversification partly to the shortage of suitable domestic investment opportunities, low market liquidity and the relatively small number of listed companies.
Expanding the range of investable assets could help pension funds and other institutional investors provide more long-term financing to businesses while supporting deeper trading activity.
What Nigeria Needs to Improve
The 2026 ranking indicates that Nigeria’s financial-market development will depend on more than introducing new instruments and strengthening financial institutions.
The country needs more predictable foreign exchange arrangements, better market reporting, broader investor participation and a larger supply of investment opportunities.
Although currency gains and stronger reserves have improved some aspects of Nigeria’s economic position, translating those improvements into accessible financing for businesses remains a key challenge.
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Nigeria Falls to Eighth in Africa Financial Markets Index
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Nigeria ranks eighth in the 2026 Absa Africa Financial Markets Index as weak FX arrangements, transparency gaps and limited market depth weigh on progress.
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