J.P. Morgan Adds Nigeria to New Bond Index With 7.4% Weight

J.P. Morgan has included Nigeria in its newly introduced Government Bond Index–Emerging Markets Edge (GBI-EM Edge), assigning the country a 7.4% weighting in the benchmark tracking local-currency government debt across frontier emerging markets.

According to a J.P. Morgan Global Index Research report dated September 14, 2026, seen and reported by Nairametrics, Nigeria has $17.47 billion worth of eligible government bonds represented across 16 instruments in the index.

The inclusion returns naira-denominated Nigerian government bonds to a J.P. Morgan emerging-market benchmark more than a decade after the country was removed from the bank’s flagship government bond index in 2015.

However, the development does not amount to Nigeria’s reinstatement in the GBI-EM Global Diversified (GBI-EM GD), as the GBI-EM Edge is a separate benchmark designed to cover frontier markets whose domestic government bonds are generally not represented in the flagship index.

Nigeria’s 7.40% weighting is close to J.P. Morgan’s maximum country allocation of 8%. The Nigerian securities included in the benchmark have an average yield to maturity of 17.1%, a duration of 3.38 years and a B- sovereign credit rating.

Vietnam, Egypt, Morocco, Pakistan, Bangladesh and Kazakhstan each have the maximum 8% weighting, while Sri Lanka has 7.50%. Kenya has a 6.91% weighting, followed by Tunisia at 5.32% and Uganda at 4.84%.

Frontier Africa accounts for 44.5% of the index, compared with 31.5% for Asia. Overall, the GBI-EM Edge tracks approximately $328 billion in local-currency government debt across 425 instruments, 26 markets and 24 currencies.

Nigeria was first admitted into J.P. Morgan’s Government Bond Index in October 2012 after developing an active domestic Federal Government of Nigeria bond market supported by market makers, a two-way quote system and a broad investor base.

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However, J.P. Morgan placed Nigeria on its Index Watch list in January 2015 over concerns about foreign exchange market illiquidity, difficulties repatriating capital, a lack of transparency in exchange-rate determination and the absence of a functional two-way FX market.

Nigeria was eventually removed from the index in September 2015 after failing to address the concerns raised by the bank.

In 2022, J.P. Morgan separately removed Nigeria from its “overweight” emerging-market sovereign debt recommendation, citing macroeconomic risks.

By April 2025, Nigeria had reopened discussions with J.P. Morgan over a possible return to its Government Bond Index, with Debt Management Office Director-General Patience Oniha pointing to reforms in the foreign exchange market.

The discussions followed reforms aimed at improving transparency, liquidity and functionality in Nigeria’s FX market.

The GBI-EM Edge is designed to capture emerging and frontier economies whose domestic government bond markets are not represented in the GBI-EM Global Diversified index.

To qualify, a country must be classified as an emerging market under J.P. Morgan’s sovereign classification framework, while its three-year average gross national income per capita must fall within the lower two-thirds of the relevant global distribution.

Individual bonds must generally be fixed-rate or zero-coupon sovereign securities, have more than 2.5 years remaining to maturity at entry and meet a minimum outstanding size equivalent to $250 million.

Nigeria’s inclusion could increase the visibility of FGN bonds among international fixed-income investors, particularly because the securities offer yields substantially above the benchmark average.

J.P. Morgan’s data shows that Nigerian securities in the index have an average yield of 17.1%, compared with the benchmark average of 10.39%.

The report also shows that the naira depreciated by 48.7% in 2023 and another 41.9% in 2024 following Nigeria’s foreign exchange reforms. The trend subsequently reversed, with the naira recording an FX return of 6.7% in 2025 and 8.1% in 2026 based on the period covered by the report.

Currency movements remain important to foreign investors because returns from naira-denominated government bonds depend on both domestic yields and the exchange rate when proceeds are converted back into dollars.

J.P. Morgan said the GBI-EM Edge initially comprised 11 markets and 76 bonds worth about $56 billion based on its 2017 inception. By August 31, 2026, coverage had expanded to 26 markets, 425 instruments and approximately $328 billion in debt.

The bank said the expansion reflects the growing importance of frontier local-currency debt markets, many of which have improved benchmark bond issuance, auction processes, post-trade infrastructure and accessibility to foreign investors.

For Nigeria, the 7.4% allocation makes it one of the largest exposures in J.P. Morgan’s new frontier local-currency debt benchmark, potentially putting naira-denominated FGN bonds back on the radar of global investors that track or benchmark their portfolios against J.P. Morgan indices.