Nigeria’s debt capital market demonstrated remarkable resilience in 2024, with corporate and sovereign bond listings surging despite challenging high interest rates and constrained liquidity conditions.
The FMDQ Exchange recorded 155 commercial paper listings throughout 2024, representing a significant increase from 127 listings in the previous year. This surge reflects strategic corporate adaptation to elevated borrowing costs and interest rate volatility through flexible short-term financing instruments.
Market analysts attribute this shift to growing corporate demand for cost-effective capital-raising alternatives amid restricted access to long-term financing options. “There has been a notable pivot to short-term instruments as companies aim to balance cash flow pressures with rising interest obligations,” according to recent market analysis.
Federal Government of Nigeria debt securities listed on the FMDQ platform reached 535 instruments in 2024, marking a 13.1 percent increase from 473 securities in 2023. The total value of these government securities expanded dramatically from N139.24 trillion to N180.91 trillion, demonstrating the federal government’s continued reliance on domestic borrowing for fiscal deficit financing and capital project funding.
This substantial growth in sovereign debt listings aligns with government strategies to navigate fluctuating oil revenues and external funding constraints through domestic market mechanisms. The approach has proven effective in maintaining financing capacity while managing external debt exposure.
Corporate debt segment performance exceeded expectations, with listings and quotations reaching 1,026 securities in 2024, up from 834 in the previous year. In value terms, the corporate debt market expanded from N7.87 trillion to N9.47 trillion, representing a robust 23 percent year-on-year increase.
Financial market experts credit this sustained corporate debt activity to strategic refinancing efforts and working capital raising initiatives. “The increase in corporate debt listings shows that businesses are adapting. They are using the capital market to stay liquid and maintain operations in a high-cost environment,” noted a leading debt capital markets analyst.
The commercial paper market’s strong performance particularly highlights corporate agility in managing financial challenges. Companies have successfully leveraged these short-term instruments to maintain operational flexibility while navigating monetary tightening cycles. Overall market performance in 2024 underscores investor confidence and demonstrates the Nigerian capital market’s expanding role as a critical financing channel for both public and private sector entities. The resilience displayed against challenging macroeconomic conditions positions the market favorably for continued growth and development.
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