MSCI Inc.’s decision to consider dropping Nigeria from its Frontier Markets Index has put $500 million of stock investments in Africa’s biggest economy under threat, according to Renaissance Capital Ltd.

Investors following the index have $500 million staked in Nigeria, half what they would have if they were properly tracking the benchmark, and those holdings are “under threat” should MSCI exclude Nigeria, according to Charles Robertson, chief economist at Renaissance, a Moscow-based investment bank focused on developing markets.

“The risk has become acute,” Robertson said in an e-mailed note. “Being excluded from such indexes creates a higher hurdle to attract future investments. Nigeria would have to become so attractive to foreign investors that they would make it an off-index investment.”

MSCI is reviewing Nigeria’s position because of foreign-exchange controls imposed by the central bank that have led to the “continuous deterioration of foreign-exchange market liquidity,” the company said in a statement on Thursday. It will make a decision by April 29.

The central bank’s currency-trading restrictions, which President Muhammadu Buhari backs, have already caused Nigeria to be excluded from JPMorgan Chase & Co. and Barclays Plc local-currency emerging market bond indexes, tracked by hundreds of billions of dollars of funds.

The Nigerian Stock Exchange All Share Index fell 0.1 to 25,346.77 at 12:13 p.m. in Lagos, extending losses this year to 12 percent, and taking the market capitalisation to $44.3 billion. Turnover dropped to $672 million in the first quarter, the lowest since at least 2009, when Bloomberg began compiling data. Volumes may continue to fall as foreign investors shun the market while they wait for a devaluation of the naira and as Africa’s biggest economy grows at its slowest pace in 17 years, according to Robert Omotunde, an analyst at Lagos-based broker Afrinvest West Africa Ltd.

“A lot of foreign investors are cautious because of the foreign-exchange risk that’s just waiting to crystallise,” Omotunde said on Thursday. “And some listed companies are barely keeping afloat.”

Nigeria has the third-biggest weighting in the MSCI Frontier Markets Index after Kuwait and Argentina. Nigerian Breweries Plc, Nestle Nigeria Plc and Guaranty Trust Bank Plc are among the 15 stocks included from the country.

•Text courtesy of Bloomberg. Photo shows Investment Minister Okechukwu Enalamah.

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