Finance

The Debt Management Office (DMO) has officially opened subscriptions for the January 2026 Federal Government of Nigeria (FGN) Savings Bond, offering interest rates of up to 15.396% per annum. The move provides Nigerian investors with another opportunity to lock in relatively high, government-backed returns amid a persistently tight monetary environment.

Details released by the DMO on Monday show that the latest issuance aligns with the Federal Government’s broader strategy to deepen the domestic debt market, diversify funding sources, and promote a culture of savings through secure, long-term financial instruments. The FGN Savings Bond programme was specifically designed to bring retail investors into the fixed-income market, while remaining attractive to institutions seeking low-risk assets.

Structure of the January 2026 offer

The current issuance features two tenors aimed primarily at individual investors but open to a wide range of market participants:

• 2-year FGN Savings Bond, maturing on January 21, 2028, with a coupon rate of 14.396% per annum

• 3-year FGN Savings Bond, maturing on January 21, 2029, offering a higher yield of 15.396% per annum

The subscription window opened on January 12, 2026, and will close on January 16, 2026, with settlement scheduled for January 21, 2026. Interest will be paid quarterly, providing investors with a steady income stream on April 21, July 21, October 21, and January 21 of each year until maturity.

Like all FGN Savings Bonds, the instruments are backed by the full faith and credit of the Federal Government of Nigeria, making them among the safest fixed-income investments in the domestic market. The bonds are issued at ₦1,000 per unit, with a minimum subscription of ₦5,000 and additional investments in multiples of ₦1,000, subject to a maximum of ₦50 million per investor.

Liquidity, tax benefits, and accessibility

One of the key attractions of FGN Savings Bonds is their accessibility. Unlike many wholesale government securities that require large minimum investments, these bonds are structured to be affordable for individuals while still meeting institutional investment standards.

The bonds are listed on the Nigerian Exchange Limited (NGX), which means investors can sell them in the secondary market before maturity if they require liquidity. In addition, interest earned on the bonds is tax-exempt for eligible investors, including pension funds and trustees under the Trustee Investment Act, further enhancing their appeal relative to many other fixed-income products.

Market context and interest rate environment

Recent FGN Savings Bond issuances reflect the persistently high interest rate environment in Nigeria’s fixed-income market. Throughout 2025, DMO offerings recorded yields largely in the mid-to-high teens, with some instruments approaching 18% per annum. This trend has been driven by tight monetary policy, elevated inflation, and strong investor demand for instruments that can help preserve purchasing power.

Against this backdrop, the January 2026 offer comes with noticeably higher rates than the previous issuance. In December 2025, the 2-year FGN Savings Bond was priced at 13.565% per annum, while the 3-year bond, due November 12, 2028, offered 14.565% per annum. The upward adjustment in January underscores both market realities and the government’s need to remain competitive in attracting domestic savings.

Why this matters for investors

For Nigerian investors seeking predictable income and capital preservation, FGN Savings Bonds offer a compelling alternative to traditional savings accounts, many of which continue to deliver negative real returns after inflation. The combination of sovereign backing, quarterly coupon payments, secondary market liquidity, and double-digit yields makes the January 2026 offer particularly attractive in the current macroeconomic climate.

Beyond individual benefits, the programme also supports broader financial market development by expanding retail participation in government securities and reducing over-reliance on institutional investors.

What you should know

FGN Savings Bonds were introduced to encourage long-term savings among Nigerians and democratize access to government debt instruments. Over time, rising yields on government securities have driven increased interest from retail investors seeking safer investment options during periods of economic uncertainty.

Nigeria’s Debt Management Office (DMO) raised a total of N1.144 trillion at its first Nigerian Treasury Bills (NTB) primary market auction of 2026, signaling both sustained investor appetite and a continued upward repricing of risk-free assets. The auction, held on January 7, 2026, closed with higher stop rates across all tenors, led by a sharp increase at the long end of the curve, where the 364-day bill cleared at 18.47%.

According to the auction results, the DMO allotted N108.17 billion for the 91-day bill, N48.23 billion for the 182-day tenor, and a dominant N987.78 billion for the 364-day paper. In total, the government offered N1.15 trillion and allotted approximately N1.14 trillion, reflecting strong system liquidity and investors’ willingness to absorb large volumes of government securities even at elevated yields.

Market analysts described the outcome as a clear signal that investors are demanding higher compensation for inflation risk and macroeconomic uncertainty, while still showing strong confidence in sovereign instruments. The repricing was evident across the curve, but most pronounced at the longer end, underscoring a preference for locking in yields in an environment where monetary conditions remain tight.

Strong demand despite higher rates

Despite the rise in stop rates, demand remained resilient, particularly for the one-year instrument. The 364-day NTB once again emerged as the centerpiece of the auction, attracting total subscriptions of about N1.38 trillion against an offer size of N800 billion. This translated into an allotment of N987.78 billion, making the one-year paper the dominant funding source for the DMO at the auction.

The stop rate on the 364-day bill climbed to 18.47%, representing a 96-basis-point increase, the largest adjustment across all maturities. Market participants attributed the strong appetite to investors’ preference for longer-dated securities that offer better yield compensation and reduce reinvestment risk in a high-interest-rate environment. With uncertainty still surrounding the pace of disinflation and future monetary easing, many investors appear keen to secure attractive returns for a longer period.

Mixed performance at the short and mid tenors

At the short end of the curve, the 91-day NTB recorded moderate participation. The DMO offered N150 billion, received subscriptions of N112.26 billion, and allotted N108.17 billion. The stop rate rose to 15.80%, up by 30 basis points, indicating that even short-dated instruments are undergoing gradual repricing as investors adjust expectations.

The 182-day bill, however, recorded comparatively weaker demand. Against an offer of N200 billion, total subscriptions came in at N49.91 billion, with N48.23 billion allotted. The stop rate settled at 16.50%, representing a 55-basis-point increase. Analysts note that subdued interest at the six-month tenor reflects growing investor selectivity, with many participants preferring either the liquidity of very short instruments or the higher yield offered by longer-dated bills.

Role of NTBs in liquidity management

Nigerian Treasury Bills are short-term negotiable securities issued by the Central Bank of Nigeria (CBN) on behalf of the Federal Government. They are a key monetary policy tool used to manage liquidity and influence interest rates in the economy. When NTBs are sold, cash is withdrawn from the financial system, helping to curb excess liquidity that could fuel inflation or weaken the naira. At maturity, funds are returned to investors with interest, injecting liquidity back into the system.

By adjusting the frequency of auctions and the stop rates at which bills are issued, the CBN and the DMO jointly influence money supply conditions, inflation dynamics, and overall financial system stability.

Implications for the fixed-income market

The N1.144 trillion raised at the first NTB auction of 2026 underscores the Federal Government’s continued reliance on the domestic debt market to meet its funding needs. It also highlights the depth of investor demand for government securities, even in a high-rate environment.

For the broader fixed-income market, the across-the-board rise in stop rates suggests that tight monetary conditions are likely to persist in the near term. Investors, particularly institutional players, are expected to continue favoring longer-dated NTBs as a means of locking in attractive returns, while shorter tenors may increasingly serve as tools for liquidity management rather than primary yield drivers.

Overall, the auction sets the tone for the year, pointing to elevated yields, strong liquidity, and a market that remains highly responsive to inflation expectations and monetary policy signals.

Nigeria’s currency, the naira, is projected to remain under sustained pressure throughout 2026, as structural weaknesses in the economy continue to weigh on foreign exchange stability. This outlook was highlighted by economist Dr. Yemi Kale during his presentation at the FirstBank Nigeria Economic Outlook 2026 forum, where he outlined multiple scenarios for the performance of the naira in the coming year.

According to Kale, the most likely outcome for the naira is a moderate but persistent depreciation, driven by ongoing challenges such as inflationary pressures, limited foreign exchange inflows, high import dependence, and lingering confidence issues in the FX market. While policy reforms have improved transparency and reduced some distortions, he noted that these measures may not be sufficient to deliver strong currency appreciation in the near term.

Under the baseline scenario, the naira is expected to trade within the range of ₦1,350 to ₦1,450 per U.S. dollar by the end of 2026. This projection assumes gradual improvements in external reserves, relative stability in oil production and export earnings, continued central bank intervention to smooth volatility, and the absence of major external shocks. By mid-year, the currency could trade around ₦1,310 to the dollar before weakening slightly toward year-end.

Despite this outlook, Kale cautioned that risks to the currency remain elevated. Structural issues such as persistent inflation, weak productivity growth, and FX mismatches across sectors could continue to exert downward pressure on the naira, making sustained stability difficult without deeper reforms.

Alternative scenarios for the currency

In a more optimistic scenario, the naira could strengthen to levels between ₦1,200 and ₦1,300 per dollar by the end of 2026. This outcome would depend on stronger global oil prices, improved domestic oil output, increased non-oil export earnings, rising remittance inflows, and effective implementation of foreign exchange reforms. A reduction in inflation and a narrowing gap between official and parallel market rates would also support currency stability under this scenario.

However, even in this more favourable case, the naira would still remain significantly weaker than historical levels, reflecting long-standing structural imbalances in Nigeria’s economy. Kale stressed that currency stability should be viewed as a gradual process rather than a rapid turnaround.

On the downside, a more adverse scenario could see the naira weaken beyond ₦1,550 to ₦1,650 per dollar by the end of 2026. This outcome could be triggered by a sharp decline in oil prices, disruptions to crude oil production, worsening fiscal pressures, rising inflation, or a renewed loss of investor confidence. In such a scenario, limited FX liquidity and widening budget deficits could intensify depreciation pressures.

Reserves, fiscal conditions, and structural reforms

The outlook also pointed to a gradual rebuilding of Nigeria’s external reserves over the medium term, supported by improved oil receipts, remittance inflows, and potential portfolio investment returns. However, Kale emphasised that reserve accumulation alone would not be sufficient to stabilise the naira without consistent policy implementation and fiscal discipline.

Efforts to reduce dependence on imported fuel through local refining were identified as a key opportunity to conserve foreign exchange. In addition, expanding exports in agriculture, manufacturing, and services could help broaden Nigeria’s FX base and reduce vulnerability to oil price shocks.

On the fiscal side, Nigeria’s debt-to-GDP ratio is expected to remain relatively stable over the medium term. However, high debt servicing costs continue to pose a challenge, with interest payments consuming a significant share of government revenue. This fiscal pressure limits the government’s ability to support the economy during periods of external stress, indirectly affecting currency stability.

Broader economic implications

The cautious outlook for the naira reflects broader macroeconomic realities facing Nigeria. While economic growth is expected to improve moderately and inflation is projected to ease gradually, uncertainties around global financial conditions, commodity prices, and domestic reforms remain key risk factors.

Kale noted that restoring confidence in the naira will require sustained efforts across monetary, fiscal, and structural policy areas. Transparent FX management, credible fiscal planning, and reforms that boost productivity and exports will be critical to improving long-term currency resilience.

As Nigeria enters 2026, the naira’s performance will likely continue to reflect the balance between reform progress and structural constraints, with moderate depreciation remaining the most probable outcome in the absence of significant external or policy-driven improvements.

Nigeria’s electricity market continues to grapple with structural payment challenges, as fresh data highlights ongoing remittance failures by a key special customer category. According to a recent report by the Nigerian Electricity Regulatory Commission (NERC), Ajaokuta Steel Company Limited and its host community did not make any payments toward electricity invoices issued in the third quarter of 2025, further compounding liquidity pressures within the power sector.

The regulator disclosed that the unpaid obligations amounted to N1.03 billion owed to the Nigerian Bulk Electricity Trading (NBET) Plc, alongside an additional N0.10 billion due to the Market Operator. The non-payment persists despite repeated invoicing, reinforcing concerns about the sustainability of settlement arrangements involving certain government-linked and special-status customers.

In its commentary, NERC described the situation as part of a long-standing pattern of default. The Commission noted that it has formally communicated the need for intervention to the appropriate Federal Government authorities, underscoring the limitations of regulatory enforcement in resolving payment failures tied to public-sector entities.

The continued non-remittance by Ajaokuta Steel stands in contrast to expectations that reforms in Nigeria’s electricity market would gradually improve payment discipline, particularly among large-volume consumers. Instead, the latest figures suggest that some legacy issues remain unresolved, placing additional strain on an already fragile market structure.

Why remittance performance matters

Payment compliance remains a central challenge in Nigeria’s Electricity Supply Industry (NESI), with far-reaching implications for the entire power value chain. Poor collections reduce available liquidity, limit the ability of power generation companies (GenCos) to recover costs, and ultimately constrain electricity supply. When GenCos are unable to meet financial obligations—such as gas payments and maintenance costs—the result is often reduced generation capacity and increased risk of system instability.

The impact extends beyond generators. NBET, which serves as the central off-taker of electricity from GenCos, relies on remittances from distribution companies and bilateral customers to meet its settlement obligations. Persistent shortfalls weaken NBET’s balance sheet and necessitate periodic government intervention to prevent systemic collapse.

The sharp disparity between the payment performance of domestic bilateral customers and international counterparties has also drawn attention to settlement risks within the market. While some international transactions have shown relatively stronger compliance, recurring domestic defaults highlight structural weaknesses that regulatory measures alone may not be able to resolve.

Understanding bilateral power arrangements

Bilateral customers purchase electricity directly from GenCos, operating outside the central trading pool managed by NBET. These arrangements are intended to promote market efficiency by allowing direct contracting between producers and large consumers. However, the effectiveness of bilateral trading depends heavily on strict payment discipline and enforceable contracts.

In practice, weak enforcement mechanisms and the involvement of politically sensitive entities have undermined the effectiveness of this model. NERC has repeatedly flagged poor remittance performance by certain bilateral customers as a recurring issue, contributing to widespread liquidity constraints across the sector.

Nairametrics has previously reported on NBET’s recurring payment shortfalls, revenue challenges faced by GenCos, and the regulatory steps taken to stabilise the market. Despite these efforts, the persistence of unpaid obligations by some customers suggests that deeper institutional and governance reforms may be required.

Government intervention and recent reforms

In recognition of the scale of payment arrears within the electricity sector, the Federal Government has taken steps to address historical debts. In December 2025, the government issued the first bond under the Presidential Power Sector Debt Reduction Programme, a landmark initiative aimed at clearing outstanding obligations owed to GenCos and gas suppliers.

The N590 billion Series 1 Power Sector Bond was issued through NBET Finance Company Plc, a special purpose vehicle established by the Nigerian Bulk Electricity Trading Plc. The bond issuance marked a significant step toward restoring confidence in the sector and easing the financial pressure on market participants.

However, analysts caution that while debt restructuring initiatives provide temporary relief, they do not address the root causes of recurring non-payment. Without stronger enforcement, improved governance, and sustained political commitment, similar arrears could accumulate again over time.

As Nigeria continues efforts to reform its electricity market, the unresolved payment issues surrounding entities such as Ajaokuta Steel highlight the ongoing tension between policy ambition and operational realities. Addressing these challenges will be critical to improving sector liquidity, attracting investment, and ensuring reliable power supply for the broader economy.

Nigeria’s currency, the naira, began trading in 2026 on a softer note, depreciating marginally to ₦1,431 per dollar at the official foreign exchange market on the first trading day of the year. The mild pullback comes after the currency closed 2025 with a strong rally, underscoring cautious sentiment among market participants as trading resumed after the New Year holiday.

Data tracked from the Nigerian Foreign Exchange Market (NFEM) shows that the naira weakened slightly on Friday, January 2, 2026, compared with its last recorded position of ₦1,429/$1 on Wednesday, December 31, 2025, which marked the final trading session of the previous year. Although the movement was modest, it represented a pause in the appreciation trend that characterised the closing days of 2025.

A closer look at the figures indicates that the naira depreciated by ₦2 on a day-on-day basis, translating to a marginal decline of about 0.14 percent. Market watchers say such early-year adjustments are not unusual, particularly after extended holidays, when delayed demand for foreign exchange tends to resurface once markets reopen.

Recent trading pattern

Despite the slight dip, recent trading sessions point to notable resilience in the naira toward the end of last year. On Tuesday, December 30, 2025, the currency traded at ₦1,445/$1, while it stood at ₦1,446.4/$1 on Monday, December 29. Going further back, the naira exchanged at ₦1,451/$1 on December 24, highlighting a gradual but consistent appreciation as the year drew to a close.

This steady strengthening in the final weeks of 2025 helped cushion the impact of the mild depreciation seen at the start of 2026, reinforcing the view that the currency has entered the new year from a relatively stronger position.

Bigger picture

On an annual basis, the naira recorded a solid performance in 2025. At ₦1,429/$1 on December 31, the currency appreciated by about 7.4 percent compared with the ₦1,535/$1 rate recorded on the final trading day of 2024. Analysts attribute this improvement to a combination of sustained foreign exchange reforms, better price discovery at the official market, and intermittent inflows from exporters and foreign portfolio investors.

Another key factor supporting the currency was the improved alignment between official and parallel market rates toward the end of the year, which helped reduce arbitrage opportunities and speculative pressures. This convergence played a role in restoring some confidence among investors and market participants.

From a longer-term perspective, the naira’s current level still represents a marked improvement from where it started in 2025. Data shows that on the first trading day of last year, January 2, 2025, the currency traded at ₦1,538.50/$1 at the official market, highlighting the scale of appreciation achieved over the past twelve months.

What this means for 2026

Market analysts say the modest depreciation at the start of 2026 does not fundamentally alter the outlook for the naira in the near term. According to Dotun Adedira, early-year softness often reflects pent-up demand following public holidays rather than a shift in underlying fundamentals.

“The naira’s relative stability in recent weeks suggests that volatility could remain limited in the short term,” he noted, adding that much will depend on policy consistency and foreign exchange supply dynamics.

Looking ahead, the currency’s performance is expected to be influenced by the policy stance of the Central Bank of Nigeria, trends in global oil prices, and the pace of foreign exchange inflows from exports and portfolio investments. Analysts believe that if FX supply improves and reforms at the official market are sustained, the naira could maintain its recent stability in the early months of 2026.

Overall, while the naira has started the year with a slight pullback, its strong finish in 2025 provides a relatively solid foundation as Nigeria navigates the new trading year.

Nigeria’s broad money supply (M3) rose sharply to N122.95 trillion in November 2025, up from N119.04 trillion in October, underscoring a continued expansion in system liquidity even as monetary authorities maintain a broadly tight policy stance. The latest figures, released by the Central Bank of Nigeria (CBN), point to accommodative liquidity conditions in the banking system amid elevated interest rates and ongoing efforts to tame inflation and stabilise the exchange rate.

On a month-on-month basis, M3 expanded by N3.91 trillion, while year-on-year growth remained robust, rising from N108.97 trillion recorded in November 2024. This sustained increase suggests that liquidity is being injected into the economy through multiple channels, raising important policy questions about how the apex bank balances growth-supportive liquidity with macroeconomic stability.

A closer look at the data shows that the rise in money supply was driven by increases in both net domestic assets (NDA) and net foreign assets (NFA). Net domestic assets climbed to N85.57 trillion in November from N84.23 trillion in October, reflecting higher claims by the banking sector on the government and the private sector. This trend is often associated with increased government borrowing, rising credit to businesses and households, or portfolio rebalancing by banks toward domestic assets in search of yield.

Net foreign assets recorded an even more striking improvement, rising to N37.38 trillion in November from N34.80 trillion in October. Compared with November 2024, when NFA stood at N17.35 trillion, the figure has more than doubled. This sharp year-on-year increase points to stronger foreign exchange inflows, improved external sector conditions, and relatively healthier reserve buffers. Together, the expansion in NDA and NFA suggests that liquidity growth in Nigeria is being fuelled by both internal credit dynamics and improved external positioning.

Other monetary aggregates followed a similar upward trajectory. Broad money measured by M2 increased marginally to N122.94 trillion in November from N119.03 trillion in October, while narrow money (M1) rose to N40.53 trillion from N39.35 trillion. The growth in M1, which captures currency in circulation and demand deposits, indicates higher transactional balances in the economy and potentially stronger short-term economic activity.

The backdrop to these developments is a series of monetary policy adjustments by the CBN in the second half of 2025. In September, the Monetary Policy Committee cut the Monetary Policy Rate (MPR) by 50 basis points to 27%, citing easing inflationary pressures and relatively improved foreign exchange conditions. However, at its November meeting, the Monetary Policy Committee opted to hold the MPR steady at 27%, signalling a more cautious approach as liquidity conditions continued to loosen.

By holding rates despite rising money supply, the CBN appears to be walking a tightrope. On one hand, expanding liquidity supports credit growth, business activity, and overall economic recovery. On the other, excessive liquidity can undermine disinflation efforts and reignite pressure on the naira if not carefully sterilised. Sustained growth in NDA, particularly from government borrowing, also raises concerns about fiscal dominance and its implications for price stability.

At the same time, the sharp improvement in net foreign assets provides some comfort. Stronger external inflows and better reserve positions can help cushion the economy against external shocks, support exchange rate stability, and give the central bank more room to manage liquidity through market operations. However, if foreign inflows are not effectively absorbed, they can further add to domestic liquidity and complicate monetary management.

What this ultimately means is that Nigeria’s monetary environment remains delicately balanced. The simultaneous rise in domestic and foreign assets highlights a liquidity expansion that supports economic activity but also increases macroeconomic risks. By maintaining a tight policy stance in November, the CBN is signalling its intention to prevent rapid money supply growth from eroding recent gains in inflation moderation and exchange rate stability.

Going forward, the effectiveness of liquidity management tools—such as open market operations, cash reserve requirements, and foreign exchange interventions—will be critical. As money supply continues to expand, investors, businesses, and policymakers will be watching closely to see whether the CBN can sustain growth-supportive liquidity without compromising price stability in 2026.

Nigerian National Petroleum Company Limited (NNPC Ltd) remitted a total of N12.117 trillion in statutory payments to the Federal Government between January and October 2025, underscoring its growing fiscal importance amid Nigeria’s ongoing energy sector reforms. The disclosure was contained in the company’s Monthly Report Summary for November 2025, released at the end of the year.

The report also revealed a notable improvement in profitability, with NNPC Ltd posting a profit after tax (PAT) of N502 billion in November 2025, up from N447 billion recorded in October. The month-on-month increase reflects improving market conditions, steady revenue inflows, and gradual stabilisation in production following maintenance-related disruptions earlier in the quarter.

In November alone, NNPC Ltd generated N4.358 trillion in revenue, highlighting sustained earnings momentum despite marginal fluctuations in hydrocarbon output. The revenue performance reinforces the company’s role as a major source of funding for the Federation Account at a time when the government is seeking to strengthen public finances and reduce fiscal pressures.

Production performance and operational updates

According to the report, average hydrocarbon production for November stood at 6,968 million standard cubic feet per day (mmscf/d), slightly lower than the 6,997 mmscf/d recorded in October. NNPC Ltd attributed the marginal decline primarily to planned maintenance activities across several key producing assets, including Esso-Erha, Stardeep-Agbami, and the Renaissance–Estuary Area.

The company explained that these maintenance exercises were part of a broader effort to improve asset integrity, reliability, and long-term output. It noted that most of the activities were nearing completion, with production recovery expected toward the end of December 2025. However, the report also acknowledged continued delays associated with the West African Exploration Project (WAEP) first oil timeline.

NNPC Ltd reaffirmed its commitment to completing its 2025 Turn Around Maintenance (TAM) programme while accelerating production initiatives across Joint Venture (JV), Production Sharing Contract (PSC), and Nigerian Exploration and Production Limited (NEPL) assets. These efforts, the company said, are critical to supporting its 2026 production targets and sustaining revenue growth.

Gas infrastructure and energy security

Beyond oil production, the report highlighted steady progress on strategic gas infrastructure projects aimed at boosting domestic energy supply and supporting industrial growth. NNPC Ltd confirmed that early works are ongoing on the OB3 River Niger Crossing, a critical component of Nigeria’s gas transmission network. In addition, the Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline remains on track for completion in 2026.

Earlier in the week, NNPC Ltd’s Group Chief Executive Officer, Bayo Ojulari, announced the successful completion of the AKK pipeline’s main line. This milestone positions the company to significantly expand gas availability in northern Nigeria, a region that has historically faced energy constraints due to limited infrastructure. Increased gas supply is expected to support power generation, industrial activity, and economic development across the region.

Why this matters

The scale of remittances and rising profitability underscore NNPC Ltd’s expanding role as a central pillar of Nigeria’s fiscal and energy architecture. With major maintenance cycles nearing completion and gas projects advancing, the company is better positioned to increase contributions to government revenue, enhance domestic energy security, and support broader economic growth in 2026 and beyond.

The results also suggest that recent sector reforms—ranging from improved operational efficiency to targeted infrastructure investment—are beginning to yield tangible outcomes. As Nigeria continues to reposition its energy sector under a commercialised national oil company model, NNPC Ltd’s financial performance will remain a key indicator of reform success.

Additional context

In a related development reported by Nairametrics, President Bola Ahmed Tinubu recently approved the cancellation of a substantial portion of debts owed by NNPC Ltd to the Federation Account. The approval reportedly wiped off about $1.42 billion and N5.57 trillion in outstanding obligations, easing the company’s balance sheet and potentially improving future cash flows.

Taken together, the strong remittance figures, rising profits, advancing infrastructure projects, and balance sheet relief point to a more resilient NNPC Ltd. As 2026 approaches, the company appears increasingly positioned to play a stabilising role in Nigeria’s public finances while driving long-term energy security and economic transformation.

Nigeria’s capital market recorded a significant surge in short-term funding activities in 2025, with more than ₦753 billion raised through commercial paper (CP) issuances between April and October, according to the Securities and Exchange Commission (SEC). The disclosure underscores growing liquidity in the market, strong investor appetite, and renewed confidence in regulatory reforms introduced over the past year.

In a statement released on Sunday, December 28, the SEC noted that the impressive volume of CP issuances reflects the increasing importance of the instrument as a flexible and efficient financing option for corporates seeking short-term funding. The Commission attributed the performance to improved market confidence, enhanced regulatory oversight, and favourable macroeconomic developments that have supported capital formation.

Speaking on the development, SEC Director-General, Emomotimi Agama, described the commercial paper market as one of the most vibrant segments of Nigeria’s capital market during the review period. According to him, CP issuances played a critical role in supporting working capital needs across key sectors of the economy, including manufacturing, agriculture, energy, and other strategic industries.

“Commercial paper issuance remained vibrant, with over ₦753 billion raised to support short-term funding needs across diverse sectors,” Agama said. He added that the resilience of the CP market demonstrates how effectively the capital market is responding to the evolving financing needs of businesses amid tight credit conditions and elevated interest rates in the banking system.

Beyond commercial papers, Agama noted that the broader debt market also recorded landmark transactions within the same period. These include the ₦500 billion Climate Funding Special Purpose Vehicle (SPV) and the ₦200 billion Elektron Finance bond issuance, both of which signal rising investor interest in infrastructure-related and sustainable finance instruments. According to him, such transactions highlight the market’s growing sophistication and its ability to mobilise long-term capital for national development priorities.

“These figures are not just numbers; they represent confidence in our regulatory framework and the resilience of our market architecture,” the SEC chief stressed. He explained that the strong performance of the CP segment forms part of wider capital-raising activities approved by the Commission across debt, equity, and hybrid instruments between April and October 2025. During this period, the market demonstrated what he described as “remarkable depth and adaptability,” reinforcing its central role in funding economic expansion.

Agama also pointed to supportive macroeconomic developments that helped strengthen investor sentiment during the year. Nigeria’s recent sovereign credit rating upgrade and its removal from the Financial Action Task Force (FATF) grey list were cited as critical confidence boosters. According to him, these milestones send a positive signal to both domestic and foreign investors about the stability and credibility of the Nigerian economy.

“These achievements signal renewed confidence in our economy. They will attract greater investment and enhance capital inflows,” he said, noting that improved global perception of Nigeria is already reflecting in higher participation across various market segments.

On monetary conditions, the SEC boss observed that easing inflationary pressures have created room for innovation within the capital market. He urged market operators to move beyond policy discussions to active execution, stressing that the capital market must increasingly position itself as a driver of inclusive economic growth. “The time for passive observation is over. Our collective responsibility is to activate opportunities and position the market as an engine of inclusive growth,” he said.

Agama also addressed the sharp downturn recorded in November, when the Nigerian Exchange lost about ₦6.54 trillion in market capitalisation. He attributed the decline to a combination of profit-taking ahead of the proposed 30 percent Capital Gains Tax, weak sentiment in banking stocks, and broader global uncertainties. He, however, noted that the market has since rebounded following policy assurances and improved investor outlook.

A key reform highlighted by the SEC DG is the migration of the equities settlement cycle from T+3 to T+2, which he described as a landmark achievement that has improved liquidity and reduced counterparty risk. He disclosed that plans are already underway to move to T+1 and ultimately T+0, aligning Nigeria with global best practices.

Commercial paper, which is a short-term unsecured debt instrument with maturities of 270 days or less, has increasingly become a preferred funding tool for corporates. The SEC confirmed that companies raised a total of ₦753 billion through CPs during the review period alone.

As Nigeria’s capital market closes 2025 on a historic high, with total market capitalisation nearing ₦150 trillion, the SEC believes that strong commercial paper activity, major debt issuances, improved macroeconomic indicators, and sustained market reforms are collectively positioning the country as one of Africa’s leading investment destinations.