Nigeria is set to attract more foreign investment into its domestic debt market after global financial services firm J.P. Morgan included Federal Government of Nigeria (FGN) bonds in its newly created Government Bond Index-Emerging Markets Edge (GBI-EM Edge).
The inclusion marks Nigeria’s return to a J.P. Morgan local-currency bond index after an 11-year absence, having been removed from the GBI-EM Global Diversified index in 2015 over foreign exchange liquidity difficulties.
Nigeria has now been assigned a 7.40 per cent weighting across 16 eligible bond instruments, one of the highest allocations among the 26 frontier markets covered by the index, which tracks about $328 billion in government debt.
Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, announced the development yesterday in Abuja during the signing ceremony for a fresh N728.9 billion power sector bond.
He said the listing was expected to attract about $17.5 billion in foreign capital into the domestic debt market and lower borrowing yields by up to 200 basis points.
Oyedele said: ‘JP Morgan, which manages the world’s most widely tracked emerging market bond indices, has just announced the inclusion of the Federal Government of Nigeria’s bond in its newly created global bond index, Emerging Market Edge.
‘This is expected to attract about $17.5 billion into our debt market and bring down the yield by up to 200 basis points.
‘If we are doing another one tomorrow, the rates will be much lower.’
According to the ministry, Nigeria qualified for the index on the strength of the liquidity and size of its FGN bond market, trading actively through a Two-Way Quote System, with outstanding bonds exceeding the $250 million minimum per tenor required for inclusion.
Nigeria previously featured in the GBI-EM index in 2012, a listing that attracted substantial foreign investment and cut the government’s borrowing costs by about 200 basis points at the time.
Oyedele described the fresh listing as ‘a clear, independent endorsement of the discipline behind President Bola Ahmed Tinubu’s reform agenda,’ crediting it to ongoing foreign exchange stabilisation, cleared FX obligations and improved macroeconomic conditions.
He added that Nigeria remained focused on meeting the criteria for full reinstatement into J.P. Morgan’s flagship index.
The announcement coincided with the Federal Government raising N728.9 billion under Series 2 of the Presidential Power Sector Debt Reduction Programme, comprising N402 billion in cash bonds raised from the capital market and N326.9 billion in non-cash bonds allotted to 11 participating electricity Generation Companies (GenCos).
Combined with the N501 billion raised under Series 1 in January 2026, the programme has now generated N1.23 trillion toward resolving the sector’s N4 trillion legacy debt backlog.
Nigerian Bulk Electricity Trading Plc (NBET) Managing Director, Mr Johnson Akinnawo, said the Series 2 issue would be implemented in two tranches and noted that participation had risen to 11 GenCos, up from eight under Series 1, reflecting growing stakeholder confidence in the programme.
Special Adviser to the President on Oil and Gas, Ms Olu Verheijen, represented by Mr Eriye Onagoruwa, said Series 1 had already led to settlement agreements covering 21 power plants, adding that Series 2 was ‘scaling’ the model the first series had proved.
Bureau of Public Enterprises (BPE) Director-General, Mr Ayodeji Gbeleyi, said the Federal Government, through the BPE, was also advancing the World Bank-financed $500 million Distribution Sector Recovery Programme, which is already improving customer enumeration, closing metering gaps and boosting revenue collection efficiency in the distribution segment.
Special Adviser to the President on Power, Dr Lanre Babalola, said the government recognised it could not build the electricity market of the future while unresolved legacy obligations persisted, but cautioned that debt resolution alone did not amount to sector reform.
He urged stakeholders to also tackle the causes of new debt accumulation.
Officials stressed that the debt resolution programme must be matched by stronger market discipline, improved revenue assurance and greater accountability across the electricity value chain to prevent fresh legacy debts from building up.
The renewed access to the J.P. Morgan benchmark is expected to boost trading activity in the FGN bond market, as fund managers tracking the index adjust portfolios to reflect Nigeria’s new weighting.
Higher demand for eligible bonds is expected to push prices up and yields down, potentially lowering the government’s cost of domestic borrowing and improving liquidity across the wider debt market, including Nigerian Treasury Bills.