NASD Deepens Nigeria’s Short-Term Capital Market
The NASD OTC Securities Exchange has emerged as Nigeria’s leading platform for Commercial Paper (CP) issuance, transforming what was once a relatively underutilised segment of the capital market into a hub for short-term corporate funding.
Over the past year, corporates across manufacturing, consumer goods, energy, and financial services have increasingly turned to CP programmes to meet working capital needs and optimise funding structures.
In a high-interest-rate environment and amid tighter bank liquidity, companies are seeking flexible, cost-efficient alternatives to traditional bank lending. Commercial Paper – short-tenor, unsecured promissory notes issued by creditworthy firms – has become a compelling solution.
The NASD’s streamlined quotation process, enhanced disclosure framework, and growing investor participation have positioned it as the preferred marketplace for these issuances.
The surge in activity signals more than transactional momentum. Corporates are establishing rolling CP programmes, enabling them to tap the market opportunistically rather than relying on episodic bank facilities.
For issuers, CP provides immediate liquidity to fund inventory cycles, bridge receivables gaps, finance production expansion, and manage seasonal demand. For investors, CP offers diversification and attractive risk-adjusted returns in a yield-sensitive environment.
The NASD’s role as a quotation and disclosure platform enhances transparency and secondary market visibility, reinforcing investor confidence and supporting price discovery.
Analysts say this growing concentration of CP activity represents a structural reallocation of short-term credit intermediation from bilateral banking relationships to a more transparent, market-driven ecosystem.
While CP is inherently short-term, its strategic implications are long-term. Firms that successfully integrate CP into their funding mix strengthen their credit profiles, positioning themselves for more favourable terms in the bond market or syndicated loans.
The NASD’s growing status as a CP hub underscores the maturation of Nigeria’s capital market, where alternative funding channels are gaining traction, and corporates are increasingly embracing market-based financing.
If current momentum continues, the NASD could solidify its role as the central clearing house for short-term corporate capital formation, transforming Commercial Paper from a tactical liquidity instrument into a foundational pillar of corporate financial strategy in Nigeria.
