Nigeria’s capital market has moved from a two‑day settlement cycle (T+2) to a one‑day cycle (T+1), becoming the first market in Africa to do so. The change means that when investors trade shares or other eligible instruments, the exchange of cash and securities is now completed one business day after the trade.
Settlement is the final step in a trade, where the buyer pays and the seller delivers the security. The period between trade date (T) and settlement date determines how long both sides are exposed to the risk that the other may not perform. Shorter cycles reduce this exposure and release funds and securities back to investors more quickly.
Major markets have been shortening their cycles over the past decade. Nigeria’s move aligns its post‑trade timetable more closely with these markets and responds to long‑standing calls for stronger risk management and efficiency in the domestic capital market.
The policy shift
The transition to T+1 follows a six‑month programme coordinated by regulators, exchanges, the central securities depository, custodians, registrars and brokers. During this period:
Trading, clearing and settlement systems were adjusted to process trades on a tighter schedule.
Operational cut‑off times for trade confirmation, funding and securities delivery were revised.
Market participants tested their readiness under the new timetable.
With the formal launch, trades executed on a given business day are now scheduled to settle on the next business day, rather than two days later.
Expected effects
From a market structure perspective, the main expected effects are:
Lower open exposure
The stock of unsettled trades at any point in time should fall, because obligations are discharged earlier. This reduces the period during which counterparty default can affect the system.Faster use of capital and securities
Investors regain access to their cash and holdings one day earlier, which can support higher turnover and more flexible portfolio management, particularly for active traders.Higher operational demands
Back‑office functions must complete trade matching, funding arrangements and error correction within a shorter window. Firms with weak internal processes face stronger pressure to upgrade systems and procedures.
Significance for the Nigerian market
This change provides information about the state of the Nigerian capital market:
It suggests that key institutions — the securities regulator, the exchange, the central securities depository and market firms — can plan and execute a complex timing change within a defined period.
It signals an intention to bring domestic post‑trade practice into closer alignment with international norms.
It places greater emphasis on the quality of operational risk management across the market.