Nigeria’s commercial paper market has grown beyond N1.9 trillion, with the Securities and Exchange Commission (SEC) positioning the short-term debt market as a pipeline for companies seeking to raise capital through public offerings.
The SEC Director-General, Emomotimi Agama, disclosed this while speaking on the Duke in Business podcast, noting that the market was expanding rapidly as companies increasingly use commercial paper to meet short-term financing needs.
According to Nairametrics Research, 23 companies brought commercial paper offers to the Nigerian money market in the third quarter of 2026, targeting a combined N446.1 billion across 43 series under programmes with a total registered size of N1.98 trillion.
Unbelievable market expansion
Agama described the market’s expansion as “unbelievable,” highlighting its potential to prepare companies 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 said.
Agama acknowledged that companies issuing commercial paper are not necessarily listed on the stock exchange but said their participation in the market could help prepare them for eventual public offerings.
He described the market as a stepping stone for companies to become more familiar with capital-raising requirements and investor expectations.
- “It brings something we call encouragement. And of course, we are leading them towards IPO. So it becomes a pipeline,” he said.
According to the SEC chief, the commission is encouraging companies with appropriate corporate structures, governance standards, annual financial statements and transparent operations to participate in the market.
He said the experience gained through commercial paper issuance could help these businesses prepare for future initial public offerings (IPOs), potentially broadening the range of companies available to investors.
SEC targets broader market participation
Commenting on concerns that five stocks account for more than 67% of the Nigerian stock market’s total valuation, Agama said the priority should be to expand participation rather than focus solely on market concentration.
He said financial literacy, investor advocacy and demonstrating the value of the capital market were central to attracting more companies and investors.
- “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 said.
Agama also said the SEC’s regulatory approach over the past two and a half years had focused on encouraging compliance rather than relying primarily on penalties.
According to him, the commission’s income from non-compliance has declined as more companies comply with regulatory requirements.
- “If I get you to comply, I don’t need to fine you,” he said.
He compared the approach to parenting, arguing that regulators should help businesses understand and meet their obligations rather than rely exclusively 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 said.
10 offers dominate third-quarter issuance
Data tracked by Nairametrics Research showed that the ten largest commercial paper offers by target size in the third quarter of 2026 collectively sought to raise N350 billion, accounting for 78.5% of the total issuance targeted during the period.
- All ten offers were primarily directed at working capital financing, highlighting the role of commercial paper in helping Nigerian companies meet short-term liquidity requirements.
- Two of the ten offers were structured as non-interest commercial paper under a Murabahah arrangement.
- Under this structure, a special purpose vehicle procures commodities or assets on behalf of the borrower and sells them on a deferred-payment basis at an agreed profit rate. This provides a Shariah-compliant alternative to conventional discount-based commercial paper.
The figures point to continued use of the market by companies seeking short-term funding, while the SEC is looking to use participation in the market to encourage stronger corporate governance and create a potential pipeline of future IPO candidates.