Nigeria’s business paper market has grown past N1.9 trillion, with the Securities and Exchange Commission (SEC) positioning the short-term debt market as a pipeline for firms in search of to boost capital by public choices.
The SEC Director-General, Emomotimi Agama, disclosed this whereas talking on the Duke in Business podcast, noting that the market was increasing quickly as firms more and more use business paper to satisfy short-term financing wants.
According to Nairametrics Research, 23 firms introduced business paper gives to the Nigerian cash market within the third quarter of 2026, focusing on a mixed N446.1 billion throughout 43 collection below programmes with a complete registered dimension of N1.98 trillion.
Unbelievable market enlargement
Agama described the market’s enlargement as “unbelievable,” highlighting its potential to organize firms for broader participation in Nigeria’s capital market.
- “We have instituted the market, which is called the commercial paper market. The commercial paper market is growing at a speed that is unbelievable. As we speak today, the commercial paper market is over 1.9 trillion,” he stated.
Agama acknowledged that firms issuing business paper will not be essentially listed on the inventory trade however stated their participation within the market may assist put together them for eventual public choices.
He described the market as a stepping stone for firms to turn out to be extra conversant in capital-raising necessities and investor expectations.
- “It brings something we call encouragement. And of course, we are leading them towards IPO. So it becomes a pipeline,” he stated.
According to the SEC chief, the fee is encouraging firms with acceptable company constructions, governance requirements, annual monetary statements and clear operations to take part within the market.
He stated the expertise gained by business paper issuance may assist these companies put together for future preliminary public choices (IPOs), doubtlessly broadening the vary of firms accessible to traders.
SEC targets broader market participation
Commenting on considerations that 5 shares account for greater than 67% of the Nigerian inventory market’s complete valuation, Agama stated the precedence ought to be to develop participation reasonably than focus solely on market focus.
He stated monetary literacy, investor advocacy and demonstrating the worth of the capital market had been central to attracting extra firms and traders.
- “It’s not having an issue. What is important, which is good for us, is to expand the space. And expanding the space is literacy. Expanding the space is advocacy. Expanding the space is making sure that the people involved see the value of the market,” he stated.
Agama additionally stated the SEC’s regulatory strategy over the previous two and a half years had centered on encouraging compliance reasonably than relying totally on penalties.
According to him, the fee’s revenue from non-compliance has declined as extra firms adjust to regulatory necessities.
- “If I get you to comply, I don’t need to fine you,” he stated.
He in contrast the strategy to parenting, arguing that regulators ought to assist companies perceive and meet their obligations reasonably than rely solely on punishment.
- “Yours is not always to flog your child. Yours is to make sure that your child understands what he or she should do. And then you guide the child to succeeding,” he stated.
10 gives dominate third-quarter issuance
Data tracked by Nairametrics Research confirmed that the ten largest business paper gives by goal dimension within the third quarter of 2026 collectively sought to boost N350 billion, accounting for 78.5% of the full issuance focused in the course of the interval.
- All ten gives had been primarily directed at working capital financing, highlighting the position of business paper in serving to Nigerian firms meet short-term liquidity necessities.
- Two of the ten gives had been structured as non-interest business paper below a Murabahah association.
- Under this construction, a particular goal automobile procures commodities or property on behalf of the borrower and sells them on a deferred-payment foundation at an agreed revenue price. This offers a Shariah-compliant different to standard discount-based business paper.
The figures level to continued use of the market by firms in search of short-term funding, whereas the SEC is wanting to make use of participation within the market to encourage stronger company governance and create a possible pipeline of future IPO candidates.
