By Peace Udugba
For many Nigerian companies, short-term funding has traditionally depended on bank overdrafts and short-tenor loans. While these remain important sources of finance, growing businesses increasingly require a broader range of funding options, including access to the capital market.
Commercial paper (CP) is emerging as an increasingly important part of that funding mix.
Commercial paper is a short-term, unsecured debt instrument, typically with maturities of less than 270 days. It enables eligible companies to raise funds for working capital and other immediate financing requirements.
The scale of activity underscores the growing relevance of the instrument. In 2026 alone, commercial paper issuances in Nigeria reached approximately ₦1.3 trillion, highlighting the significant volume of short-term corporate funding already being mobilised through the market.
However, much of this activity continues to take place over the counter (OTC).
While the OTC market has played an important role in developing Nigeria’s commercial paper market, moving more of this activity onto an organised exchange could provide additional benefits, including greater transparency, stronger issuer visibility, broader investor access and the potential for secondary-market liquidity.
Why Commercial Paper Listing Matters
The case for exchange-listed commercial paper goes beyond changing where the instrument is traded. Organised market infrastructure can enhance the experience of both issuers and investors while contributing to the overall depth and efficiency of the market.
For issuers, listing can improve visibility and help build a market track record. Each successful issuance and redemption gives investors greater familiarity with the company and its credit profile.
Over time, such a track record can become valuable when an issuer returns to the market to seek larger or longer-term financing.
For investors, an organised market can provide greater visibility into available instruments and standardised information. Where secondary-market activity develops, investors may also have an avenue to exit their positions before maturity rather than necessarily holding the commercial paper until maturity.
The broader market can benefit as well.
Greater participation through an exchange can support price discovery, improve transparency and create conditions for deeper secondary-market activity.
Commercial paper can therefore evolve beyond being a financing instrument that is simply issued and held to maturity. It can become part of a wider market ecosystem supported by organised infrastructure.
Jude Chiemeka, Chief Executive Officer of Nigerian Exchange Limited (NGX), said commercial paper represents an important avenue for strengthening the connection between businesses and the capital market.
“Commercial paper gives eligible corporates a flexible and efficient avenue to access short-term capital directly from investors, while providing investors with additional opportunities across the fixed-income spectrum. By bringing more of this activity onto an organised exchange, we can enhance transparency, broaden participation and support the development of a deeper and more efficient market for short-term corporate funding,” he said.
The flexibility offered by commercial paper is particularly relevant to businesses whose working-capital requirements do not always align with conventional bank financing.
Inventory purchases, supplier obligations, receivables and other working-capital pressures can arise within relatively short business cycles. Commercial paper enables eligible companies to match their funding more closely to these needs.
Exchange listing can further enhance that process by providing visibility, market infrastructure and access to a wider pool of investors.
NGX Commercial Paper Framework
Nigerian Exchange Limited has recognised the opportunity through its Commercial Paper Listing Framework.
Introduced on December 3, 2025, following approval by the Securities and Exchange Commission (SEC), the framework expanded NGX’s multi-asset offering beyond equities and longer-term debt instruments to include short-term corporate debt.
The framework reached a significant milestone in February 2026, when Dangote Cement Plc listed its Series 1 and Series 2 commercial papers under its ₦500 billion Commercial Paper Issuance Programme.
The combined value of the two issuances stood at approximately ₦119.87 billion, marking NGX’s first commercial paper listing and establishing a precedent for other companies seeking access to the organised market.
Other companies have since followed.
NGN Gram Limited, Coleman Technical Industries Limited and MeCure Industries Plc have collectively listed approximately ₦89.49 billion in commercial paper on NGX.
The growing number of issuers demonstrates that commercial paper listing can appeal to businesses across different sectors of the Nigerian economy.
Commercial Paper as a Capital-Market Gateway
The significance of the development extends beyond the value of individual transactions.
For companies, commercial paper listing can serve as an entry point into the organised capital market. An issuer that successfully raises and redeems commercial paper establishes a relationship with investors while building a market profile before pursuing larger debt or equity transactions.
That progression could prove important for the development of Nigeria’s capital market.
Capital-market participation does not necessarily have to begin with a major equity offering or a long-term bond. For some companies, a short-term funding requirement may provide a more natural starting point.
Commercial paper can serve as that bridge.
Building a Deeper Commercial Paper Market
For NGX, the opportunity goes beyond adding another financial product to its offering.
Commercial paper strengthens the Exchange’s multi-asset proposition by complementing equities and longer-term debt with an instrument designed for the shorter end of the funding curve.
The next priority is scale — bringing more issuers and investors into an organised market environment while supporting the development of greater secondary-market activity.
This is important to the evolution of Nigeria’s capital market.
A deeper capital market is not defined solely by the number of products available, but by how effectively those products connect businesses seeking capital with investors seeking opportunities.
Commercial paper has already demonstrated its relevance as a source of short-term corporate funding.
The opportunity now is to build the market infrastructure around it.
In that sense, commercial paper is not simply another instrument listed on an exchange. It is part of the broader architecture of a more complete capital market — one that gives companies greater choice in funding their businesses, provides investors with more opportunities across the capital structure and creates stronger pathways for companies to progress from short-term market access to broader capital-market participation.
