Nigerian companies raised more than N1.3 trillion through commercial papers in the first nine months of 2026 as bank lending rates above 30 per cent pushed businesses towards alternative sources of financing.
The shift comes despite the Central Bank of Nigeria’s reduction of the Monetary Policy Rate from 26.5 per cent to 23 per cent in September, with high borrowing costs continuing to pressure business operations and profitability.
Data from FMDQ showed that outstanding commercial papers stood at N501.13 billion as of August 2026, with an average tenor of 272 days and an average discount rate of 19.29 per cent. In the third quarter, 23 companies targeted N446.1 billion through 43 issuance series.
Commercial papers are short-term debt instruments that allow companies to raise funds directly from investors, usually for periods of less than one year. Businesses use them to finance inventories, cover operating expenses, and manage liquidity without relying solely on bank loans.
Dangote Cement Plc led the market expansion, raising N119.87 billion through two commercial paper series in February under its N500 billion programme. It also became the first company to list commercial papers on the Nigerian Exchange (NGX).
Other issuers included CapitalSage Technology Limited, which secured approval for N45.12 billion in October, and Sunbeth Global Concepts Limited, which quoted N150.41 billion in June.
Coleman Technical Industries and MeCure Industries also listed commercial papers worth a combined N89.49 billion on the NGX, while several other companies across manufacturing, healthcare and financial services tapped the market.
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United Nigeria Airlines announced plans on October 16 to become the first domestic airline to issue commercial paper, proposing N20 billion through two series under a N100 billion programme. The move could provide an additional funding channel for airlines facing high fuel, maintenance, and other operating costs.
The growing activity follows the NGX’s introduction of a commercial paper listing segment in December 2025 to improve market transparency and expand corporate access to investors.
NGX Chief Executive Officer Jude Chiemeka said the platform would broaden financing options for businesses and strengthen transparency in the debt market.
Market analysts attributed the trend to high bank lending rates, increased awareness of commercial papers and investor demand for competitive returns.
Managing Director of Global View Capital Limited, Aruna Kebira, said companies were increasingly recognising the instrument as an accessible funding option, while investors viewed it as a way to diversify their portfolios.
Investors are attracted by returns that can exceed those offered by some conventional short-term investments. However, commercial papers are generally unsecured, meaning investors risk losing money if an issuer cannot meet its repayment obligations.
National Chairman of the New Dimension Shareholders Association, Patrick Ajudua, said commercial papers from established companies could offer attractive returns but warned that investors must consider the risks involved.
Similarly, Vice Chairman of HighCap Securities Limited, David Adnori, described the instrument as a flexible way for companies to bridge short-term funding gaps and maintain liquidity.
Despite its growing popularity, analysts say companies must carefully manage repayment schedules and ensure sufficient cash flow to meet obligations when they fall due.
The expansion of the commercial paper market is providing Nigerian businesses with an alternative to expensive bank credit, while connecting companies seeking short-term funding with investors looking for competitive returns.
