Nigeria has been included in JPMorgan Chase & Co.’s newly created Government Bond Index–Emerging Markets Edge, marking the country’s return to a major JPMorgan local-currency bond benchmark 11 years after it was removed from the bank’s mainstream emerging-markets government bond index.
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The new benchmark, known as GBI-EM Edge, is scheduled to be launched by the end of September 2026 and will track approximately $328 billion in local-currency government debt across 26 frontier and fast-growing economies.
Nigeria has reportedly been assigned a 7.4 per cent weighting in the index, placing it among the countries expected to have the largest representation.
Other major constituents include Egypt, Vietnam, Morocco, Kazakhstan, Bangladesh, Pakistan and Sri Lanka. Individual country weightings have been capped at eight per cent to prevent any single market from dominating the benchmark.
The index is expected to cover about 425 eligible debt instruments across the 26 participating markets, providing global investors with a benchmark for assessing the performance of local-currency government bonds issued by frontier economies.
To qualify for inclusion, eligible bonds must have an outstanding value equivalent to at least $250 million and a remaining maturity of not less than two-and-a-half years.
African countries are expected to account for almost 45 per cent of the new index, while countries classified as “Frontier Asia,” particularly Vietnam, Kazakhstan, Pakistan and Bangladesh, will constitute nearly one-third.
The inclusion gives Nigerian government bonds increased visibility among international fund managers who rely on JPMorgan indices to allocate investments and measure the performance of their emerging and frontier-market portfolios.
It could also encourage additional foreign portfolio investment into Nigeria’s domestic bond market, although index inclusion does not automatically guarantee capital inflows. Actual investment decisions will depend on factors including exchange-rate stability, liquidity, inflation, interest rates and investors’ confidence in the government’s economic policies.
JPMorgan developed the index in response to growing investor demand for higher-yielding government debt issued in the domestic currencies of frontier economies.
The new benchmark is expected to offer a nominal yield of about 10.4 per cent, approximately 440 basis points higher than JPMorgan’s mainstream emerging-market local-currency bond index.
Back-testing of the index reportedly showed that it would have generated annualised returns about 1.2 percentage points higher than the mainstream benchmark during the preceding nine years.
Economists believe that the development of frontier-market local-currency bond indices could help countries deepen their domestic debt markets and reduce excessive dependence on foreign-currency borrowing.
Borrowing in local currency can reduce the risk that governments will face sharply higher repayment obligations when their currencies depreciate against the United States dollar and other international currencies.
Nigeria was admitted into JPMorgan’s Government Bond Index–Emerging Markets in October 2012 after reforms made the country’s bond market more accessible to foreign investors.
In September 2015, JPMorgan announced Nigeria’s removal from the index, citing a lack of liquidity and restrictions affecting foreign-exchange transactions. The removal was implemented in phases and completed by the end of October 2015.
At the time, the bank said foreign investors were encountering difficulties conducting transactions at market-determined exchange rates and obtaining the level of liquidity required for index eligibility.
The Federal Government and the Central Bank of Nigeria have since introduced several foreign-exchange and financial-market reforms aimed at improving transparency, restoring liquidity and attracting international capital.
In April 2025, the government confirmed that it had resumed discussions with JPMorgan concerning Nigeria’s possible return to the mainstream emerging-markets bond index.
However, Nigeria’s inclusion in the GBI-EM Edge should not be interpreted as formal readmission into the old GBI-EM benchmark. The Edge is a separate, newly established index designed specifically for frontier local-currency debt markets.
The new index will complement JPMorgan’s Next Generation Markets Index, which has tracked hard-currency bonds issued by frontier economies for nearly two decades.
While the hard-currency index covers sovereign bonds denominated principally in dollars, the GBI-EM Edge will focus on government securities denominated in the domestic currencies of participating countries.
JPMorgan indices are widely followed by global asset managers and can influence investment flows into developing economies because funds benchmarked against them may acquire bonds from participating markets.
Analysts estimate that tradable local-currency emerging-market debt has tripled over the past decade to approximately $1 trillion. The new GBI-EM Edge will track nearly one-third of that amount.
Nigeria’s 7.4 per cent weighting consequently represents a significant opportunity for the country to showcase its domestic bond market to international investors.
The development may also strengthen demand for Federal Government securities and broaden the country’s investor base. However, sustaining the benefits will require continued foreign-exchange liquidity, predictable monetary policy, transparent debt management and unrestricted access for investors seeking to repatriate their funds.
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