A. INTRODUCTION
The capital markets landscape in Nigeria entered a new era in 2025, a year marked by structural reforms that quietly but decisively reshaped how companies raise and manage capital. Key among these were the passage of the Investment and Securities Act 2025 (ISA 2025), a comprehensive framework for corporate and private company debt issuance, the SEC’s formalisation of commercial paper regulations, the adoption of a T+2 settlement cycle, and recapitalisation mandates for banks, insurers, and pension fund administrators.
In particular, the Rules on the Issuance and Allotment of Private Companies’ Securities, issued by the SEC on 24 April 2025, brought private company debt firmly under regulatory oversight. Before this, many issuances operated in a grey zone, leaving investors and issuers exposed to legal and operational risk. Similarly, the SEC Commercial Paper Rules of December 2024, effective 1 July 2025, now ensure that all commercial paper transactions adhere fully to ISA 2025 standards.
The result of these reforms is striking. While equity markets often dominate headlines, corporate debt is quietly becoming the backbone of structured capital formation. Per FMDQ’s recent data, in 2025 alone, commercial paper issuance in Nigeria exceeded ₦1.61 trillion despite a high interest rate environment. This represents a 40% increase compared to the N1.15 trillion recorded in the previous year.
This is not a defensive retreat from liquidity challenges; it is a deliberate strategic shift. Under the supervision of the Securities and Exchange Commission and the Nigerian Exchange Limited, issuers are institutionalising debt programmes, embedding governance and disclosure discipline, and signalling that debt is no longer peripheral, it is central to how Nigerian companies plan, grow, and compete.
B. WHY ISSUERS ARE CHOOSING THE MARKET OVER BANKS
Three structural drivers explain the 2026 surge.
First, pricing flexibility: While benchmark rates remain elevated, capital market instruments allow issuers to negotiate pricing through competitive investor demand rather than fixed bilateral negotiations.
Second, tenor optimisation: Commercial paper and bond programmes provide rolling liquidity options, allowing issuers to stagger maturities and manage refinancing risk more deliberately.
Third, investor diversification: Institutional investors, including pension fund administrators and asset managers, are actively seeking high quality corporate paper. This demand has created depth that did not exist a decade ago.
The result is that companies with credible governance and transparent reporting are accessing capital faster and in larger volumes than before.
C. THE REGULATORY ARCHITECTURE ISSUERS CANNOT IGNORE
Issuing commercial paper is not simply a funding decision. It is a compliance exercise governed by the Investment and Securities Act 2025 and the SEC CP Rules.
Key requirements include:
1. Registration of the programme with the SEC;
2. Appointment of trustees and issuing houses
3. Credit rating assessments;
4. Disclosure documentation that meets statutory thresholds; and
5. Continuous reporting obligations once listed or registered
Failure in documentation or disclosure is not merely procedural. It exposes directors to regulatory sanctions and reputational risk.
In 2026, regulators are demonstrably more assertive in enforcing compliance standards. Boards must therefore treat programme establishment as a governance matter, not merely a treasury function.
D. STRATEGIC IMPLICATIONS FOR BOARDS AND CFOS
Boards should now ask four disciplined questions.
1. Is our capital structure overly dependent on short term bank facilities.
2. Have we considered establishing a standing commercial paper programme rather than episodic issuance.
3. Does our governance framework meet the disclosure expectations of market investors.
4. Are we positioning ourselves for potential bond issuance or equity listing in the medium term.
In many cases, a well structured debt programme serves as a rehearsal for deeper market participation. It imposes reporting discipline, strengthens internal controls, and familiarises management with investor engagement.
Boards that address these questions are not just compliant; they are signalling to investors that they are market-ready.
E. WHAT THIS MEANS FOR MEDIUM-SIZED AND GROWTH COMPANIES
Historically, capital markets were viewed as the preserve of large corporates. That assumption is eroding.
Medium sized issuers are increasingly exploring commercial paper as a bridge instrument. Successful issuance builds credibility, enhances credit perception, and positions the company for more sophisticated instruments.
For growth companies contemplating expansion, structured debt may offer a less dilutive path than premature equity issuance.
However, entry without careful structuring can be costly. Programme documentation, covenant design, trustee engagement, and rating strategy require careful legal orchestration.
CONCLUSION
Nigeria’s capital markets in 2026 are evolving through disciplined debt issuance, stronger regulatory supervision, and deeper institutional participation. The conversation is no longer confined to IPOs. It now centres on how intelligently companies design their capital structure within a formal securities framework.
For issuers willing to approach the market strategically, the opportunity is significant. For those who treat it casually, the regulatory and reputational risks are equally real.
The capital market is rewarding preparation.
Please do not treat the foregoing as legal advice as it only represents the public commentary views of the authors. All enquiries on this should please be directed at the authors.
