Nigeria’s capital market recorded more than N753 billion in commercial paper (CP) issuances between April and October 2025, underlining the growing importance of short-term debt instruments in corporate financing.

This also signals renewed investor confidence in the country’s regulatory and macroeconomic direction.

The Securities and Exchange Commission (SEC), which disclosed the figures, said the strong issuance activity reflected deepening liquidity in the market, sustained demand from investors, and the impact of reforms aimed at strengthening market transparency and efficiency.

In a statement released on Sunday, December 28, SEC Director-General Emomotimi Agama described the commercial paper segment as one of the most active areas of the capital market during the period, providing critical funding support to companies across key sectors of the economy.

According to Agama, firms in manufacturing, agriculture, energy, and other strategic industries tapped the CP market extensively to meet short-term working capital needs, as tighter bank credit conditions and elevated interest rates pushed corporates to seek alternative funding channels.

“Commercial paper issuance remained vibrant, with over N753 billion raised to support short-term funding needs across diverse sectors,” he said, adding that the scale and frequency of the issuances point to growing sophistication among both issuers and investors.

Beyond commercial paper, the SEC said the broader debt market also recorded landmark transactions that highlighted investors’ increasing willingness to back longer-dated and thematic instruments. Agama cited the N500 billion Climate Funding Special Purpose Vehicle and the N200 billion Elektron Finance bond issuance as examples of deals that underscore rising interest in infrastructure-linked and sustainable finance products.

“These figures are not just numbers; they represent confidence in our regulatory framework and the resilience of our market architecture,” the SEC chief said, noting that the transactions reflect a shift toward more diversified capital-raising structures.

Agama explained that the strong CP performance formed part of a wider set of capital-raising activities approved by the Commission across debt, equity, and hybrid instruments between April and October. He said the market showed “remarkable depth and adaptability” during the period, reinforcing its role as a key channel for mobilizing funds to support economic expansion.

The SEC also pointed to supportive macroeconomic developments that helped shore up investor sentiment. Nigeria’s recent sovereign credit rating upgrade and its removal from the Financial Action Task Force (FATF) grey list were cited as major confidence boosters, particularly for foreign portfolio investors who have historically been cautious about regulatory and compliance risks.

“These achievements signal renewed confidence in our economy,” Agama said. “They will attract greater investment and enhance capital inflows.”

On monetary conditions, the SEC boss said easing inflationary pressures has created room for innovation across capital market products, while urging market participants to move decisively from policy discussions to practical execution.

“The time for passive observation is over. Our collective responsibility is to activate opportunities and position the market as an engine of inclusive growth,” he said.

Agama also addressed recent volatility in the equities market. In November, the Nigerian Exchange lost about N6.54 trillion in market capitalization, a sharp downturn he attributed to profit-taking ahead of the proposed 30% capital gains tax, weak sentiment around banking stocks, and broader global uncertainties. He said the market has since staged a rebound, helped by policy assurances and renewed investor confidence.

A key structural reform highlighted by the SEC is the migration of the equities settlement cycle from T+3 to T+2, a change Agama described as a landmark step that has improved liquidity and reduced counterparty risk. He said plans are already in motion to move to T+1 and, ultimately, same-day settlement under a T+0 framework.

Commercial paper, which is a short-term unsecured debt instrument typically issued for maturities of 270 days or less, has become increasingly attractive to both issuers and investors. For companies, it offers faster access to funding at competitive rates, while investors benefit from relatively high yields in a regulated environment.

The strong CP issuance comes as Nigeria’s capital market closes 2025 at a historic high. Total market capitalization stood at N149.88 trillion as of December 24, just shy of the N150 trillion mark for the first time. The growth has been driven by robust performance across equities, bonds, and exchange-traded products, supported by regulatory reforms, high domestic investor participation, and solid corporate actions.

Equities accounted for N97.89 trillion, or about 65% of total market value, while bonds contributed N51.55 trillion and ETPs added N43.20 billion. The NGX All-Share Index delivered a 49.17% year-to-date gain, placing the Nigerian Exchange among Africa’s top-performing bourses in 2025. Market turnover more than doubled over the year, driven largely by domestic retail and institutional investors seeking higher returns in a tight monetary environment.

Taken together, the SEC said the surge in commercial paper issuance, major debt deals, improving macroeconomic indicators, and ongoing market infrastructure reforms are strengthening Nigeria’s positioning as one of Africa’s most attractive investment destinations, with the capital market playing an increasingly central role in financing growth.

The Chairman and Chief Executive Officer of Air Peace, Allen Onyema, has warned that domestic economy airfares in Nigeria could surge beyond N1 million from 2026, as airlines brace for the implementation of new tax reform laws that he says threaten the survival of the local aviation industry.

Speaking on The Morning Show on Arise News on Sunday, Onyema linked the potential fare spike directly to provisions in the tax reform package scheduled to take effect in January 2026. According to him, the reforms roll back key incentives introduced under the 2020 Finance Act, incentives that had offered airlines temporary relief in an already high-cost operating environment.

At the core of Onyema’s concern is the reintroduction of Value Added Tax on aircraft, spare parts, and air tickets. These items had been exempted under the 2020 Finance Act as part of efforts to stabilize Nigeria’s aviation sector, which has struggled for years with high costs, limited access to credit, and persistent foreign exchange pressures.

Onyema explained that the implications are severe. An aircraft imported at a value of around $80 million would immediately attract 7.5% VAT under the new rules, translating into billions of naira in additional costs at today’s exchange rates. He said airlines would have little choice but to pass those costs on to passengers.

“By the time you bring these things in, at the end of the day, the cost of operation will be huge,” Onyema said during the interview. “Your ticket fares will hit N1. something million soon.”

He added that Nigerian airlines lack the financial buffers to absorb new taxes, noting that borrowing costs in the country can reach as high as 35%. In his words, expecting airlines to take on additional fiscal burdens under such conditions is unrealistic and potentially destructive.

“If we implement that tax reform, Nigerian airlines could go down within three months,” he warned.

Onyema also questioned the policy direction behind taxing air transportation, citing the International Civil Aviation Organization’s annexes, which state that VAT should not be imposed on air transport services. He argued that aviation should be treated as a strategic sector that enables trade, tourism, and economic integration, not as a revenue source to be squeezed.

Beyond the looming tax changes, Onyema painted a broader picture of an industry under sustained pressure. He said Nigerian airlines face a combination of high fuel prices, multiple statutory charges, and foreign exchange constraints that significantly erode their revenue.

To illustrate the point, Onyema disclosed that for a domestic ticket priced at about N350,000, airlines retain roughly N81,000, with the balance taken up by taxes, levies, charges, and fees payable to various agencies. This, he said, undermines the narrative that airlines are profiteering at passengers’ expense.

He pushed back against frequent public criticism over high fares, arguing that Nigerian domestic ticket prices remain among the cheapest in the world when converted to U.S. dollars. Even at current levels, he said, many routes are barely viable. Flights to parts of the Southeast, in particular, often return with few passengers, leaving airlines to absorb losses.

On operational challenges, Onyema addressed complaints about flight delays and cancellations, saying many disruptions stem from factors beyond airlines’ control. These include bird strikes, inadequate airport infrastructure, and lapses by ground handling companies. He said airlines are often blamed for issues rooted in systemic weaknesses across the aviation value chain.

His comments come at a time when the wider policy environment remains uncertain. While Nigeria is preparing to implement tax reforms that could raise costs for airlines, a separate regional initiative points in the opposite direction. Under a 2024 agreement by ECOWAS member states, all air ticket taxes across the sub-region are to be abolished from January 1, 2026, with the aim of reducing fares and boosting regional connectivity.

That contrast has raised questions about how Nigeria will align its domestic tax regime with regional commitments. In 2024, data from the International Air Transport Association showed that Nigeria earned about $62 million from airline ticket taxes, part of the $1.97 billion collected across Africa. For governments facing fiscal pressures, aviation remains an attractive source of revenue, even as airlines warn of the long-term consequences.

Earlier in December 2025, Nigeria also implemented an additional $11.5 security levy under the Advance Passenger Information System, pushing total charges on international tickets to $31.50. Airlines say such incremental charges, when layered on top of each other, steadily weaken the sector.

Against this backdrop, people are asking whether regional initiatives under ECOWAS will force a rethink, easing costs and preventing the sharp fare increases Onyema now warns could be imminent.