Commercial Paper Market Skyrockets 107% to N1.58tn in 2025!
The Nigerian commercial paper (CP) market is experiencing unprecedented growth, with new listings in the first seven months of 2025 more than doubling compared to the same period in 2024, reaching N1.58 trillion.
Key Highlights:
• Market Growth: Up 107.16% from N763.43bn in January–July 2024.
• Peak Months: March (+270.9%) and July (+1,686%) accounted for 46% of total 2025 new listings.
• Declines: January (-4.8%) and April (-3.9%) saw minor drops in new listings.
What is Commercial Paper?
Commercial paper is a short-term, unsecured debt instrument issued by banks and large corporations to finance payrolls, inventories, payables, and other short-term obligations.
Who’s Using CPs?
Businesses across manufacturing and financial services sectors tapped into the market, including:
• Lucky Fibres, DLM Capital, MTN Nigeria
• Lagos Free Zone, Robust International Commodities
• SG Holdings, Coleman Technical Industries
• Addosser Microfinance Bank, C&I Leasing PLC
• Citibank Nigeria, Access Bank, FSDH Merchant Bank
• Stanbic IBTC Bank, Alert Microfinance Bank
• Fidson Healthcare, Providus Bank, Ojaja Pan Africa
Outstanding Value
• Total CP maturities at end of July: N112.94bn
• Outstanding CPs: N1.54tn, a 15.3% increase month-on-month
Analysts’ Take
• Agusto & Co.: High-interest rates drove CP issuance as banks remain liquid with a 59.4% liquidity ratio, projected to exceed 60% by year-end.
• Norrenberger: Companies are turning to short-term instruments to mitigate long-term borrowing costs, with CPs quoted at steep discount rates of up to 25% for 270-day tenors.
• Expected trend: CP issuance likely to rise further, especially as yields gradually moderate and inflation eases (July 2025: 21.88%).
Outlook
• The Central Bank of Nigeria (CBN) may adopt a more accommodative monetary policy before year-end, potentially cutting rates by 200bps to stimulate borrowing, private sector investment, and economic growth.
• Risks: Global commodity price volatility, geopolitical tensions, and domestic fiscal pressures may affect interest rate decisions.
The CP market surge reflects companies’ growing reliance on short-term financing to manage costs amid high interest rates and tight liquidity, signaling a dynamic shift in corporate funding strategies.
The Nigerian commercial paper (CP) market is experiencing unprecedented growth, with new listings in the first seven months of 2025 more than doubling compared to the same period in 2024, reaching N1.58 trillion.
Key Highlights:
• Market Growth: Up 107.16% from N763.43bn in January–July 2024.
• Peak Months: March (+270.9%) and July (+1,686%) accounted for 46% of total 2025 new listings.
• Declines: January (-4.8%) and April (-3.9%) saw minor drops in new listings.
What is Commercial Paper?
Commercial paper is a short-term, unsecured debt instrument issued by banks and large corporations to finance payrolls, inventories, payables, and other short-term obligations.
Who’s Using CPs?
Businesses across manufacturing and financial services sectors tapped into the market, including:
• Lucky Fibres, DLM Capital, MTN Nigeria
• Lagos Free Zone, Robust International Commodities
• SG Holdings, Coleman Technical Industries
• Addosser Microfinance Bank, C&I Leasing PLC
• Citibank Nigeria, Access Bank, FSDH Merchant Bank
• Stanbic IBTC Bank, Alert Microfinance Bank
• Fidson Healthcare, Providus Bank, Ojaja Pan Africa
Outstanding Value
• Total CP maturities at end of July: N112.94bn
• Outstanding CPs: N1.54tn, a 15.3% increase month-on-month
Analysts’ Take
• Agusto & Co.: High-interest rates drove CP issuance as banks remain liquid with a 59.4% liquidity ratio, projected to exceed 60% by year-end.
• Norrenberger: Companies are turning to short-term instruments to mitigate long-term borrowing costs, with CPs quoted at steep discount rates of up to 25% for 270-day tenors.
• Expected trend: CP issuance likely to rise further, especially as yields gradually moderate and inflation eases (July 2025: 21.88%).
Outlook
• The Central Bank of Nigeria (CBN) may adopt a more accommodative monetary policy before year-end, potentially cutting rates by 200bps to stimulate borrowing, private sector investment, and economic growth.
• Risks: Global commodity price volatility, geopolitical tensions, and domestic fiscal pressures may affect interest rate decisions.
The CP market surge reflects companies’ growing reliance on short-term financing to manage costs amid high interest rates and tight liquidity, signaling a dynamic shift in corporate funding strategies.