In a landmark move to modernise Nigeria’s capital market operations, the Central Securities Clearing System (CSCS) Plc has announced the transition from a three-day to a two-day trade settlement cycle. The reform, industry stakeholders say, represents a strategic shift towards global best practices and is expected to significantly boost market efficiency, liquidity, and investor confidence.
The CSCS, the country’s central clearing and settlement institution, disclosed the development in a statement released on Thursday. With the new framework, transactions executed on the Nigerian Exchange Limited (NGX) will now be settled within two working days—down from the previous three-day (T+3) cycle.
The move effectively places Nigeria among leading emerging markets such as South Africa, India, and Brazil, where similar T+2 cycles are already in operation. It also aligns with international markets like the United States and the United Kingdom, which have long embraced faster post-trade processes to improve operational efficiency and reduce systemic risk.
A Major Step Toward Modern Market Infrastructure
Speaking on the development, the Managing Director and Chief Executive Officer of CSCS, Mr. Haruna Jalo-Waziri, described the transition as a defining moment in Nigeria’s market reform journey and a reflection of the institution’s commitment to innovation and excellence.
“This transition marks a significant milestone in our pursuit of operational excellence and market efficiency. By shortening the settlement timeframe, we are improving liquidity, reducing counterparty and settlement risks, and creating a more competitive environment for investors both at home and abroad,” Jalo-Waziri said.
He explained that the decision forms part of CSCS’s long-term vision to build a world-class post-trade infrastructure that supports Nigeria’s evolving capital market and enables seamless participation for both institutional and retail investors.
“The introduction of a two-day cycle is not just about speed; it’s about trust, reliability, and positioning Nigeria’s capital market as a preferred destination for investment,” he added.
Market Analysts Applaud the Reform
Financial analysts and market participants have commended the move, describing it as a progressive reform capable of transforming Nigeria’s investment landscape. They note that a shorter settlement cycle reduces the time between trade execution and completion, thereby lowering exposure to credit and operational risks while enhancing liquidity and turnover in the market.
A capital market consultant, Mr. Tunde Ajayi, said the T+2 structure represents a crucial evolution for Nigeria’s financial system.
“This move aligns Nigeria with global standards, boosts investor confidence, and signals readiness for greater foreign participation. Faster settlement means more efficient capital flow and a stronger, more transparent market structure,” he noted.
Another analyst, Mrs. Ifeoma Nwafor, highlighted that the new system could improve Nigeria’s attractiveness to portfolio investors who value speed, security, and efficiency in markets where they deploy capital.
“Global investors are often guided by how quickly they can move in and out of positions with minimal risk. With this development, Nigeria sends a strong message that it is ready for deeper integration into global capital markets,” she said.
A Step Toward Global Integration
The transition to a T+2 settlement cycle is not just an operational change; it’s a key reform that reflects Nigeria’s broader ambition to modernise its financial ecosystem. Across the world, markets have continued to shorten settlement cycles to improve efficiency and mitigate financial risk.
The United States, for instance, implemented its T+2 system in 2017 and is now moving toward a one-day (T+1) model. India made a similar transition in 2022, while South Africa has long maintained a two-day cycle. Nigeria’s adoption of the same standard, experts say, positions it among reform-driven economies determined to strengthen investor trust and institutional reliability.
CSCS and Its Role in the Market
Established as the financial market infrastructure responsible for the clearing, settlement, and delivery of securities traded on the Nigerian Exchange and other approved platforms, the CSCS has been instrumental in driving transparency and efficiency in post-trade activities.
Over the years, the organisation has invested heavily in technology, data systems, and risk management frameworks to ensure seamless processing of transactions and protect market participants from disruptions. Its latest move to shorten the settlement window underscores this commitment to excellence and global relevance.
Market experts believe that the reform could set the tone for broader digital transformation in the Nigerian financial space, potentially influencing the adoption of automated systems and fintech-driven solutions across other segments of the capital market.
A Positive Outlook for Investors
The two-day settlement cycle is expected to reduce transaction friction, ensure faster cash and asset flows, and promote greater participation in the equity market. Analysts also predict that the reform will contribute to improved turnover on the NGX and strengthen Nigeria’s position as an attractive investment destination in sub-Saharan Africa.
As the CSCS continues to modernise its operations and align with international standards, stakeholders believe that the new settlement framework represents more than just a procedural upgrade—it’s a clear signal of Nigeria’s determination to build a transparent, resilient, and globally competitive capital market.
“This initiative reflects Nigeria’s growing maturity in financial market operations,” one market observer remarked. “It’s a move that will not only boost investor confidence but also reaffirm the nation’s readiness to compete globally.”
With this transition, the CSCS has reaffirmed its role as a key driver of innovation in the Nigerian capital market—one that is poised to bridge the gap between local practices and international market standards, while deepening the country’s investment landscape for sustainable growth.
