With the primary equities market experiencing a prolonged chill, Nigerian corporate issuers are aggressively shifting their gaze toward the short-term debt capital market.
The cooling of the Initial Public Offering (IPO) landscape – stifled by macro headwinds, stringent regulatory bottlenecks, and muted investor appetite – has forced companies to re-evaluate their capital raising strategies, favouring alternatives like the Commercial Paper (CP) market.
The NGX All-Share Index has gained 57.27 percent year-to-date (YtD), equities market capitalisation is approaching N157 trillion, while market turnover has exceeded N4.3 trillion, reflecting strong investor participation and confidence.
Despite this positive, companies preference for Commercial Papers over the equities market has become a massive trend for corporate finance teams across Nigeria.
Government policy can stimulate IPOs …
“The strength of a capital market should not be assessed solely by the number of IPOs recorded within a given period,” said David Adonri, Vice President, Highcap Securities Limited.
He noted that government policy plays a critical role in stimulating listings.
“Measures such as privatisation through the capital market, incentives for publicly listed companies, reforms that improve the ease of doing business, tax incentives for issuers and investors, and policies that strengthen investor confidence can significantly expand the pipeline of new listings,” Adonri added.
While Nigerian corporates route to CPs because they offer a fast, non-dilutive, and highly flexible way to keep the wheels of business turning without making permanent compromises on the company’s ownership structure, trading data show that between 2024 and year-to-date 2026, Nigerian Exchange recorded approximately N26.398 trillion in value-bearing listings across equities, fixed income securities, Sukuk, REITs and closed-end funds.
Though the equities market has seen moments of incredible bullish growth in terms of value and volume of shares traded, companies are increasingly routing their financing strategies through the FMDQ debt market via CPs for several highly strategic reasons.
Unlike the lengthy and cumbersome process of staging an IPO, launching a CP programme allows creditworthy companies to tap into a deep pool of institutional liquidity—such as pension fund administrators and asset managers—seeking yield in a high-inflation environment.
“A vibrant capital market is one that efficiently mobilises capital, creates wealth for investors, provides diverse financing options for issuers, and supports economic growth. On these measures, the Nigerian capital market has remained resilient and vibrant.
According to Adonri, a more comprehensive assessment of market performance should consider the breadth and depth of capital formation across the market.
“This underscores the market’s continued ability to facilitate capital mobilisation and investment opportunities beyond traditional IPO activity,” Adonri said.
He noted that while IPO issuance has been relatively subdued, mirroring trends observed in several markets globally, listing activity is influenced by a range of factors including macroeconomic stability, interest rate conditions, exchange rate certainty, regulatory efficiency, and government policies designed to encourage private sector participation in the capital market.
“As ongoing economic reforms begin to yield results, we expect more companies across strategic sectors of the economy to consider the capital market as a preferred platform for raising long-term capital and achieving sustainable growth.”
He added that sustained collaboration among government, regulators, market operators and private sector stakeholders would be essential to deepening the market, broadening participation and unlocking the next wave of listings that will further strengthen Nigeria’s capital market and economy.
As the equity market undergoes a prolonged fallow period, the CP market is no longer just an alternative—it has become the primary engine driving corporate liquidity and short-term growth in Nigeria’s evolving financial landscape.
The Commercial Paper (CP) market on the FMDQ Securities Exchange has remained a bustling hub for short-term corporate debt financing. Nigerian corporates continue to utilize CPs to optimise their working capital and manage short-term liquidity needs.
“Commercial paper issuance remained vibrant, supporting short-term funding needs across diverse sectors, from manufacturing to energy and agriculture. These figures are not just numbers; they represent confidence in our regulatory framework and the resilience of our market architecture,” according to Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC).
The primary trends governing 2026 issuances reflect the Central Bank of Nigeria’s (CBN) monetary policy adjustments (including an early 2026 MPR cut), with gross yields generally settling between 19 percent to 22 percent for AAA/AA-rated corporate giants and 22 percent to 26 percent for mid-tier issuers.
Several prominent Nigerian companies have advanced their Commercial Paper programmes, registrations, and quotations on FMDQ.
“Nigeria’s banks increasingly rely on short-term commercial papers (CPs) to navigate liquidity challenges amid stringent cash reserve policies enforced by the Central Bank of Nigeria (CBN), making it a vital but costly tool to navigate the liquidity squeeze,” according Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co.
FMDQ has registered over 167 Commercial Paper programmes valued at over N1 trillion ($6.19 billion) historically. The total outstanding value of active, quoted CPs on the exchange has hovered around the N826.67 billion to N1.03 trillion range depending on the month and corporate repayment schedules.
Some notable companies and their CPs …
Some of the notable companies and CP activities on FMDQ are Accion Microfinance Bank Limited which actively quoted a N2.02 billion Commercial Paper on the FMDQ Exchange to accelerate its micro-lending capabilities and promote financial inclusion across the country.
Also, Providus Bank Limited successfully registered its massive N100 billion Commercial Paper Programme on the platform, reinforcing the financial institution’s capacity to source competitive short-term funding.
Sycamore Integrated Solutions Limited, a digital lending firm established a footway in the institutional market with the registration of a N20billion CP Programme on FMDQ Exchange.
Furthermore, UAC of Nigeria (UACN) Plc continued its robust market presence by launching a N65 billion Commercial Paper Issuance Programme to support its FMCG, real estate, and animal feeds operations.
Also, Sunbeth Global Concepts Limited registered an expansive N200 billion CP Programme on FMDQ, signaling aggressive working capital expansion within the agricultural commodities export sector.