Nigerian Corporates Defy High Interest Rates with N1.6 Trillion CP Issuances in 2025

Despite Nigeria's high borrowing costs and a restrictive monetary environment in 2025, Nigerian corporations raised a total of N1.61 trillion through commercial paper (CP) issuances, marking a significant 40% increase from the N1.15 trillion recorded in the previous year. Data compiled by Nairametrics Research and FMDQ revealed that this surge in CP issuances occurred amidst a backdrop of a high-interest rate regime following the Central Bank of Nigeria's aggressive monetary tightening cycle in 2024 aimed at curbing inflation and stabilizing the naira.

The average discount rate on CP rose to 22.38%, with an average tenor of 233 days compared to 21.69% and 225 days in the previous year. Victor Onyema, the Head of Investments at Norrenberg Asset Management Limited, noted that corporations are increasingly turning to capital markets, particularly short-term instruments like commercial papers, for working capital and trade finance due to constraints in accessing external financing.

This trend indicates that firms are willing to absorb higher financing costs in exchange for quicker execution and more flexible funding options.