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Nigeria: Africa’s next securities finance frontier
01 September 2026
Nigeria’s securities market is entering a decisive phase of development as regulatory clarity, statutory netting protections, and institutional mobilisation begin to converge. With the transition to T+1 now complete, the jurisdiction is demonstrating a level of operational readiness that is cementing its position in sub-Saharan Africa’s evolving market infrastructure. Theodore Law explores
Image: stock.adobe.com/Mujib
Nigeria’s decisive phase: Settlement acceleration and market momentum
Nigeria’s capital market officially transitioned to a T+1 settlement cycle for equities and commodities on 1 June 2026, becoming the first African jurisdiction to complete the shift. The Securities and Exchange Commission of Nigeria (SEC Nigeria) reinforced this transition by setting a strict 17:00 T+1 final payment and settlement deadline through the Central Securities Clearing System (CSCS), signalling a regulatory commitment to settlement discipline and operational certainty.
This acceleration is more than a technical milestone. It represents a structural shift in Nigeria’s market architecture, reducing settlement risk, improving cash‑flow predictability, and enhancing the operational backbone required for securities lending activity. For beneficial owners and intermediaries, T+1 provides a clearer foundation for collateral management, daily mark‑to‑market processes, and fail‑reduction mechanisms.
“From an African securities finance perspective, the market is moving from concept to implementation, albeit at different speeds across jurisdictions,” says Hitesh Harduth, head of securities lending at Standard Bank and chairman of the South Africa Securities Lending Association. His assessment captures Nigeria’s position as the frontier market closest to converting regulatory intent into executable liquidity.
Harduth notes that Nigeria’s progress reflects a broader continental trend. “Across Africa, regulators and market participants increasingly recognise that securities lending is not a theoretical exercise but a practical mechanism to improve settlement efficiency, support market‑making, and unlock institutional balance sheets,” he says. “Nigeria is demonstrating what happens when regulatory clarity and operational readiness begin to align.”
Legal certainty and netting protections
Legal certainty remains the foundational determinant of international participation, and Nigeria’s statutory recognition of close‑out netting has become its strongest competitive advantage.
The Companies and Allied Matters Act 2020 (CAMA) introduced explicit netting provisions that recognise qualified financial contracts and enforce netting arrangements, including in insolvency scenarios. This statutory protection places Nigeria among the few African jurisdictions with fully recognised netting frameworks, materially reducing counterparty risk for both domestic and offshore institutions.
According to Tina Baker, head of legal services at the International Securities Lending Association (ISLA) and ISLA Connects lead, rising requests for netting opinion coverage across frontier markets signal growing interest from global firms. “The availability of robust netting opinions provides market participants with confidence in the enforceability of their contractual rights, particularly in default and insolvency scenarios,” she explains.
Baker notes that Nigeria’s statutory framework is a meaningful differentiator. “Nigeria’s strongest differentiator is its legal framework for close‑out netting,” she says. “It materially enhances legal certainty and aligns the jurisdiction with internationally recognised risk‑management standards.”
Harduth emphasises the importance of this development. “Netting certainty is the single most important prerequisite for international firms assessing new markets,” he says. “Nigeria’s statutory protections remove a major barrier to entry and signal that the jurisdiction is serious about building a functional securities finance ecosystem.”
This alignment is particularly significant for pension funds regulated by the National Pension Commission (PenCom), which require clear legal protections before deploying assets into lending programmes. With statutory netting in place, pension fund administrators (PFAs) have a credible foundation to evaluate lending activity within their risk frameworks.
Regulatory alignment and market architecture
Nigeria’s regulatory ecosystem is unusually coordinated for a frontier market. The SEC Nigeria, the Nigerian Exchange (NGX), and PenCom have established a unified framework recognising the Global Master Securities Lending Agreement (GMSLA) documentation, collateralisation standards, haircut requirements, and daily mark‑to‑market processes.
This multi‑agency alignment reduces operational friction for custodians and intermediaries, providing a familiar structure for international firms accustomed to mature‑market workflows. It also supports domestic adoption by clarifying responsibilities across beneficial owners, custodians, and brokers, reducing behavioural inertia among PFAs and other institutional asset owners.
Harduth highlights the significance of this coordination. “Regulatory alignment is often the missing link in early‑stage markets,” he says. “Nigeria’s regulators are not only aligned but actively engaged in building a framework that supports both domestic and offshore participation.”
He adds that Nigeria’s regulatory clarity stands out in the region. “Many markets have ambition, but Nigeria has structure,” he says. “That structure is what ultimately enables liquidity.”
The combination of statutory netting certainty, T+1 settlement discipline, and regulatory coordination, creates a uniquely supportive environment for securities lending activity. For international firms evaluating frontier markets, Nigeria now offers a clearer operational and legal foundation than any other jurisdiction outside South Africa.
Institutional mobilisation: PFAs, custodians, and behavioural readiness
The mobilisation of domestic pension assets represents Nigeria’s most significant liquidity opportunity. PFAs collectively manage trillions of Nigerian naira in long‑term assets, including equities that could materially improve settlement efficiency and market‑making capacity if deployed into lending programmes.
Operationalising this asset pool requires behavioural alignment and robust risk management, particularly among custodians responsible for oversight.
“PFAs have paved the way, but as a custodian, our foremost responsibility is the effective management of risk and the protection of clients’ assets,” says Deji Aluko, head of investor services product management at Stanbic IBTC Bank.
She notes that daily, technology‑enabled oversight supports collateral monitoring, regulatory reporting, and compliance with SEC Nigeria-prescribed haircut requirements. These operational safeguards are essential for beneficial owners evaluating lending activity within conservative risk frameworks.
Domestic participants are also drawing on regional experience. “Many of the milestones achieved by the Nigerian securities lending team have been driven by the strong support and expertise leveraged from Standard Bank Group,” Aluko adds. She highlights joint market‑education initiatives with the NGX and the role of South African market veterans in strengthening governance and confidence.
Aluko is clear on Nigeria’s trajectory. “Without hesitation, Nigeria stands out as the market most likely to achieve significant securities lending liquidity outside South Africa,” she says.
“Nigeria has the scale, the regulatory clarity, and the institutional asset base required for meaningful liquidity formation,” Harduth adds. “The question is no longer whether Nigeria will activate securities lending, but how quickly the market will reach sustainable volume.”
Operational readiness: T+1, infrastructure, and settlement discipline
Nigeria’s operational infrastructure is increasingly aligned with international standards. Daily mark‑to‑market processes, collateralisation rules, and technology‑enabled oversight provide the transparency and risk controls required for institutional participation.
The NGX continues to strengthen settlement discipline and operational resilience, while custodians are investing in systems capable of supporting real‑time collateral monitoring and automated reporting. These developments reduce perceived operational risk for both domestic and offshore participants, creating a more credible environment for lending activity.
Harduth emphasises the importance of operational reliability. “Infrastructure is the backbone of any securities lending market,” he says. “Nigeria’s progress in settlement discipline, collateral management, and operational workflows is critical to building confidence among beneficial owners.”
He notes that operational readiness is often underestimated. “Markets can have regulatory frameworks and legal certainty, but without operational reliability, liquidity will not form,” he says. “Nigeria is addressing all three pillars simultaneously.”
The transition to T+1 amplifies this readiness. Faster settlement cycles reduce exposure windows, improve cash‑flow predictability, and support the daily operational cadence required for lending programmes. For PFAs and custodians, T+1 provides a more stable environment for collateral management and fail‑reduction mechanisms.
Nigeria’s liquidity horizon
Nigeria’s securities finance landscape is moving decisively from theoretical ambition to structured implementation. Statutory netting protections, regulatory alignment, T+1 settlement discipline, and growing institutional readiness have positioned the jurisdiction as Africa’s strongest near‑term candidate for meaningful liquidity formation outside South Africa.
As PFAs gradually overcome behavioural inertia and custodians continue to enhance operational safeguards, Nigeria is laying the groundwork to unlock dormant domestic assets and attract offshore capital. The next phase will involve deepening repo market development, strengthening collateral velocity, and expanding market‑education initiatives to support broader adoption.
Harduth summarises Nigeria’s trajectory succinctly. “Nigeria has all the foundational elements required for a functional securities lending market,” he says. “What we are seeing now is the transition from regulatory ambition to executable liquidity. The market is ready.”
Nigeria’s evolution reflects a broader continental shift towards structured market development, but its progress is uniquely accelerated by statutory netting certainty, regulatory coordination, settlement modernisation, and institutional scale. As these elements continue to converge, Nigeria is positioned to become Africa’s next securities finance frontier.
Nigeria’s capital market officially transitioned to a T+1 settlement cycle for equities and commodities on 1 June 2026, becoming the first African jurisdiction to complete the shift. The Securities and Exchange Commission of Nigeria (SEC Nigeria) reinforced this transition by setting a strict 17:00 T+1 final payment and settlement deadline through the Central Securities Clearing System (CSCS), signalling a regulatory commitment to settlement discipline and operational certainty.
This acceleration is more than a technical milestone. It represents a structural shift in Nigeria’s market architecture, reducing settlement risk, improving cash‑flow predictability, and enhancing the operational backbone required for securities lending activity. For beneficial owners and intermediaries, T+1 provides a clearer foundation for collateral management, daily mark‑to‑market processes, and fail‑reduction mechanisms.
“From an African securities finance perspective, the market is moving from concept to implementation, albeit at different speeds across jurisdictions,” says Hitesh Harduth, head of securities lending at Standard Bank and chairman of the South Africa Securities Lending Association. His assessment captures Nigeria’s position as the frontier market closest to converting regulatory intent into executable liquidity.
Harduth notes that Nigeria’s progress reflects a broader continental trend. “Across Africa, regulators and market participants increasingly recognise that securities lending is not a theoretical exercise but a practical mechanism to improve settlement efficiency, support market‑making, and unlock institutional balance sheets,” he says. “Nigeria is demonstrating what happens when regulatory clarity and operational readiness begin to align.”
Legal certainty and netting protections
Legal certainty remains the foundational determinant of international participation, and Nigeria’s statutory recognition of close‑out netting has become its strongest competitive advantage.
The Companies and Allied Matters Act 2020 (CAMA) introduced explicit netting provisions that recognise qualified financial contracts and enforce netting arrangements, including in insolvency scenarios. This statutory protection places Nigeria among the few African jurisdictions with fully recognised netting frameworks, materially reducing counterparty risk for both domestic and offshore institutions.
According to Tina Baker, head of legal services at the International Securities Lending Association (ISLA) and ISLA Connects lead, rising requests for netting opinion coverage across frontier markets signal growing interest from global firms. “The availability of robust netting opinions provides market participants with confidence in the enforceability of their contractual rights, particularly in default and insolvency scenarios,” she explains.
Baker notes that Nigeria’s statutory framework is a meaningful differentiator. “Nigeria’s strongest differentiator is its legal framework for close‑out netting,” she says. “It materially enhances legal certainty and aligns the jurisdiction with internationally recognised risk‑management standards.”
Harduth emphasises the importance of this development. “Netting certainty is the single most important prerequisite for international firms assessing new markets,” he says. “Nigeria’s statutory protections remove a major barrier to entry and signal that the jurisdiction is serious about building a functional securities finance ecosystem.”
This alignment is particularly significant for pension funds regulated by the National Pension Commission (PenCom), which require clear legal protections before deploying assets into lending programmes. With statutory netting in place, pension fund administrators (PFAs) have a credible foundation to evaluate lending activity within their risk frameworks.
Regulatory alignment and market architecture
Nigeria’s regulatory ecosystem is unusually coordinated for a frontier market. The SEC Nigeria, the Nigerian Exchange (NGX), and PenCom have established a unified framework recognising the Global Master Securities Lending Agreement (GMSLA) documentation, collateralisation standards, haircut requirements, and daily mark‑to‑market processes.
This multi‑agency alignment reduces operational friction for custodians and intermediaries, providing a familiar structure for international firms accustomed to mature‑market workflows. It also supports domestic adoption by clarifying responsibilities across beneficial owners, custodians, and brokers, reducing behavioural inertia among PFAs and other institutional asset owners.
Harduth highlights the significance of this coordination. “Regulatory alignment is often the missing link in early‑stage markets,” he says. “Nigeria’s regulators are not only aligned but actively engaged in building a framework that supports both domestic and offshore participation.”
He adds that Nigeria’s regulatory clarity stands out in the region. “Many markets have ambition, but Nigeria has structure,” he says. “That structure is what ultimately enables liquidity.”
The combination of statutory netting certainty, T+1 settlement discipline, and regulatory coordination, creates a uniquely supportive environment for securities lending activity. For international firms evaluating frontier markets, Nigeria now offers a clearer operational and legal foundation than any other jurisdiction outside South Africa.
Institutional mobilisation: PFAs, custodians, and behavioural readiness
The mobilisation of domestic pension assets represents Nigeria’s most significant liquidity opportunity. PFAs collectively manage trillions of Nigerian naira in long‑term assets, including equities that could materially improve settlement efficiency and market‑making capacity if deployed into lending programmes.
Operationalising this asset pool requires behavioural alignment and robust risk management, particularly among custodians responsible for oversight.
“PFAs have paved the way, but as a custodian, our foremost responsibility is the effective management of risk and the protection of clients’ assets,” says Deji Aluko, head of investor services product management at Stanbic IBTC Bank.
She notes that daily, technology‑enabled oversight supports collateral monitoring, regulatory reporting, and compliance with SEC Nigeria-prescribed haircut requirements. These operational safeguards are essential for beneficial owners evaluating lending activity within conservative risk frameworks.
Domestic participants are also drawing on regional experience. “Many of the milestones achieved by the Nigerian securities lending team have been driven by the strong support and expertise leveraged from Standard Bank Group,” Aluko adds. She highlights joint market‑education initiatives with the NGX and the role of South African market veterans in strengthening governance and confidence.
Aluko is clear on Nigeria’s trajectory. “Without hesitation, Nigeria stands out as the market most likely to achieve significant securities lending liquidity outside South Africa,” she says.
“Nigeria has the scale, the regulatory clarity, and the institutional asset base required for meaningful liquidity formation,” Harduth adds. “The question is no longer whether Nigeria will activate securities lending, but how quickly the market will reach sustainable volume.”
Operational readiness: T+1, infrastructure, and settlement discipline
Nigeria’s operational infrastructure is increasingly aligned with international standards. Daily mark‑to‑market processes, collateralisation rules, and technology‑enabled oversight provide the transparency and risk controls required for institutional participation.
The NGX continues to strengthen settlement discipline and operational resilience, while custodians are investing in systems capable of supporting real‑time collateral monitoring and automated reporting. These developments reduce perceived operational risk for both domestic and offshore participants, creating a more credible environment for lending activity.
Harduth emphasises the importance of operational reliability. “Infrastructure is the backbone of any securities lending market,” he says. “Nigeria’s progress in settlement discipline, collateral management, and operational workflows is critical to building confidence among beneficial owners.”
He notes that operational readiness is often underestimated. “Markets can have regulatory frameworks and legal certainty, but without operational reliability, liquidity will not form,” he says. “Nigeria is addressing all three pillars simultaneously.”
The transition to T+1 amplifies this readiness. Faster settlement cycles reduce exposure windows, improve cash‑flow predictability, and support the daily operational cadence required for lending programmes. For PFAs and custodians, T+1 provides a more stable environment for collateral management and fail‑reduction mechanisms.
Nigeria’s liquidity horizon
Nigeria’s securities finance landscape is moving decisively from theoretical ambition to structured implementation. Statutory netting protections, regulatory alignment, T+1 settlement discipline, and growing institutional readiness have positioned the jurisdiction as Africa’s strongest near‑term candidate for meaningful liquidity formation outside South Africa.
As PFAs gradually overcome behavioural inertia and custodians continue to enhance operational safeguards, Nigeria is laying the groundwork to unlock dormant domestic assets and attract offshore capital. The next phase will involve deepening repo market development, strengthening collateral velocity, and expanding market‑education initiatives to support broader adoption.
Harduth summarises Nigeria’s trajectory succinctly. “Nigeria has all the foundational elements required for a functional securities lending market,” he says. “What we are seeing now is the transition from regulatory ambition to executable liquidity. The market is ready.”
Nigeria’s evolution reflects a broader continental shift towards structured market development, but its progress is uniquely accelerated by statutory netting certainty, regulatory coordination, settlement modernisation, and institutional scale. As these elements continue to converge, Nigeria is positioned to become Africa’s next securities finance frontier.
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