The Transition to T+2: A New Era for Nigeria’s Capital Market
On 28 November 2025, Nigeria’s capital market officially transitioned to a T+2 settlement cycle, marking a significant milestone in the country’s financial evolution. This shift is aimed at enhancing market efficiency, reducing risk, and aligning with global post-trade standards.
A Journey from T+3 to T+2
Bola Ajomale, Executive Commissioner, Operations of the Securities and Exchange Commission (SEC), shared his experiences as a “floor warrior” during a press conference. He recounted how, in the past, trade settlements took weeks, with some investors waiting up to a year for their stock certificates. This long process was fraught with challenges, including delays and the use of upcountry cheques.
Haruna Jalo-Waziri, Managing Director/CEO of Central Securities Clearing System Plc (CSCS), highlighted how the vision for a T+2 settlement period began. At an Association of Custodians’ conference in London, he boldly announced Nigeria’s intent to move to T+2, which initially surprised attendees. However, this bold statement sparked ongoing discussions about the benefits of shorter settlement cycles.
Understanding the Settlement Cycle
According to HSBC, the settlement cycle refers to the time between a securities transaction being traded and when it is settled. It is typically denoted as T+X, where “T” is the trade date and “X” is the number of business days until settlement. While many global markets have adopted T+2, there is a growing trend towards even shorter cycles, such as T+1.
The US and Canada operate on a T+1 cycle, while the UK and Europe aim to transition to T+1 by October 2027. In Africa, Nigeria has moved to T+2, and the BRVM is set to follow suit in December 2025. The Johannesburg Stock Exchange still uses a T+3 cycle for equities and bonds.
Technology and Cost Implications
To achieve this transition, CSCS implemented major technology upgrades, including the IBM Power 10 series. Jalo-Waziri emphasized that the system upgrade was completed seamlessly over a single weekend. The benefits include improved liquidity, faster settlement, reduced counterparty risk, and greater investor confidence.
Cost implications were also addressed. Jalo-Waziri noted that the cost was less than four per cent of CSCS’s revenues last year, significantly lower than the typical 18–25 per cent seen in similar transitions. This minimal cost is attributed to gradual investments over the years, ensuring a sustainable approach.
Impact on Investors and the Capital Market
Temi Popoola, Chairman of CSCS, highlighted the broader impact of the T+2 transition. He emphasized that this milestone strengthens investor confidence, deepens liquidity, and positions Nigeria’s market within global standards. The transition is not just an operational achievement but a strategic signal of Nigeria’s commitment to efficiency, transparency, and global competitiveness.
Jalo-Waziri added that the transition enhances competitiveness and investor confidence. He shared a personal anecdote about his son, who finds the current capital market processes too slow compared to online shopping experiences. This story underscores the need for faster, more efficient systems.
Stakeholder Engagement and Risk Management
Jalo-Waziri affirmed that all stakeholders were engaged in the transition process. Extensive testing, process changes, and risk assessments were conducted. The systems are now robust, with a dispute-resolution mechanism in place involving brokers, settlement banks, and custodians.
Risk management is a top priority, with post-trade processes now 95 per cent automated. This automation reduces physical interactions and enhances market integrity.
Outlook for the Future
Looking ahead, Jalo-Waziri mentioned that support channels, system-testing environments, and readiness teams will be in place to manage any issues during the transition. For retail investors, T+2 means faster access to funds and a more efficient trading experience.
While celebrating T+2, the prospect of T+1 is on the horizon. With improvements in payment systems, central-bank collaboration, and infrastructure, Nigeria is well-positioned for this next step. If all goes well, T+1 could become a reality as early as May next year.
