Nigeria’s Commercial Paper Market Surges 244% In July

Nigeria’s Commercial Paper Market Surges 244% in July

Nigeria’s commercial paper CP market recorded a sharp increase in activity in July 2026, with the value of commercial papers quoted on the FMDQ Securities Exchange rising by 244.41 per cent to N126.71 billion from N36.79 billion recorded in June. The N89.92 billion increase signals stronger corporate borrowing activity as businesses increasingly turn to the short-term fixed-income market to raise funds amid elevated borrowing costs. According to data from the exchange, the agriculture sector led issuance during the month, accounting for 44.4 per cent of the total number of commercial papers quoted, with four instruments issued. Market operators said the development reflects growing demand for alternative sources of short-term financing, particularly for working capital, production, inventory and other operational needs. Commercial papers are short-term debt instruments issued by companies to raise immediate funds. They allow businesses to access capital-market financing while providing investors with opportunities to earn returns over relatively short investment periods. The value of outstanding commercial papers also increased during the month, rising by 5.18 per cent, or N24.11 billion, to N489.45 billion. The increase came despite commercial paper maturities worth N102.61 billion during the period. Chief Executive Officer of the Centre for the Promotion of Private Enterprise CPPE, Dr Muda Yusuf, attributed the surge largely to the high cost of bank financing and the prevailing monetary policy environment. Yusuf said companies were seeking alternative funding channels as borrowing from commercial banks became increasingly expensive. He noted that while the current monetary policy stance may provide broader economic benefits, it also creates challenges for businesses through higher financing costs and tighter access to credit. The latest figures suggest that Nigeria’s commercial paper market is becoming an increasingly important funding avenue for companies seeking to manage cash-flow pressures and meet short term financing requirements.