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 looking for 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 fulfill short-term financing wants.
According to Nairametrics Research, 23 firms introduced business paper presents to the Nigerian cash market within the third quarter of 2026, focusing on a mixed N446.1 billion throughout 43 sequence beneath 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 mentioned.
Agama acknowledged that firms issuing business paper will not be essentially listed on the inventory alternate however mentioned 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 acquainted with 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 mentioned.
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 mentioned 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 issues that 5 shares account for greater than 67% of the Nigerian inventory market’s complete valuation, Agama mentioned the precedence ought to be to broaden participation moderately than focus solely on market focus.
He mentioned 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 mentioned.
Agama additionally mentioned the SEC’s regulatory method over the previous two and a half years had targeted on encouraging compliance moderately than relying totally on penalties.
According to him, the fee’s earnings 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 mentioned.
He in contrast the method to parenting, arguing that regulators ought to assist companies perceive and meet their obligations moderately 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 mentioned.
10 presents dominate third-quarter issuance
Data tracked by Nairametrics Research confirmed that the ten largest business paper presents by goal dimension within the third quarter of 2026 collectively sought to boost N350 billion, accounting for 78.5% of the full issuance focused throughout the interval.
- All ten presents had been primarily directed at working capital financing, highlighting the position of economic paper in serving to Nigerian firms meet short-term liquidity necessities.
- Two of the ten presents had been structured as non-interest business paper beneath a Murabahah association.
- Under this construction, a particular objective car procures commodities or belongings on behalf of the borrower and sells them on a deferred-payment foundation at an agreed revenue price. This gives a Shariah-compliant various to traditional discount-based business paper.
The figures level to continued use of the market by firms looking for 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.
