Commercial paper (CP) has become one of the most popular short-term investment options in Nigeria as companies increasingly use it to raise working capital. CPs are unsecured debt instruments issued by corporates and typically have maturities ranging from 90 to 364 days.
Because these instruments are not backed by collateral, investors rely heavily on the issuer’s credit rating and financial strength. In Nigeria, CPs are classified as money market instruments due to their short tenure and are usually issued at a discount. However, investors seeking higher returns often choose CPs with an implied yield, where returns are paid at maturity.
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CPs remain attractive because they generally offer better returns than bank fixed deposits, while still maintaining relatively low risk when issued by top-tier companies.
Why Companies Issue Commercial Paper
Firms use CPs to finance:
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Inventory purchases
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Short-term operational needs
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Bridge financing
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Cash-flow management
Under the FMDQ Commercial Paper Programme, issue sizes typically range from ₦10 billion to more than ₦200 billion.
Who Issues CP in Nigeria?
Commercial paper is mostly issued by large corporations with strong balance sheets, including:
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Manufacturing & FMCG firms
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Industrial companies
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Telecommunications companies
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Agriculture & agro-processing businesses
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Oil & gas servicing firms
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Financial institutions (non-banks)
Frequent issuers include Dangote Cement, MTN Nigeria, Flour Mills of Nigeria, Nigerian Breweries, BUA Group, Lafarge Africa, Seplat, Dangote Sugar, and Daraju Industries, among others.
Who Buys Commercial Paper?
Investors in CP typically include:
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Pension Fund Administrators (PFAs)
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Asset managers
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Insurance companies
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Commercial and microfinance banks
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High-net-worth individuals
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Corporate treasurers
Why Investors Choose CP
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Higher yields than savings and fixed deposits
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Lower risk than long-term corporate bonds
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Short duration reduces inflation and interest-rate exposure
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Offers portfolio liquidity
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Often issued by high-credit-quality companies
Where to Track CP Issuances
Reliable data can be sourced from:
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FMDQ Securities Exchange (new quotations, CP pages, issuer search)
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Investment banks and issuing houses such as Stanbic IBTC Capital, Chapel Hill Denham, Coronation Merchant Bank, CardinalStone, Afrinvest, Meristem, Cordros, CFG Africa
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Corporate press releases published on NGX or financial news platforms
Key Risks to Consider
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Credit risk: CPs are unsecured, so failed companies may default.
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Liquidity risk: Not all CPs can be sold easily before maturity.
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Market risk: Rising interest rates make existing CPs less attractive.
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Regulatory risk: Sudden policy changes could affect business models.
How to Invest in CP
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Obtain a CSCS/CHN number through a broker or asset manager.
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Ask your investment firm for available CPs and compare rates.
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Select the preferred tenor and yield type (discount or implied).
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Review the issuer’s credit rating and financials.
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Confirm cash-flow stability and debt levels.
Recent Commercial Paper Offers (November)
Daraju Industries – closes 27 Nov 2025
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270 days: 18.55% discount, 21.50% yield
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364 days: 18.38% discount, 22.50% yield
Dangote Cement – closed 19 Nov 2025
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181 days: 16.10% discount, 17.50% yield
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265 days: 18.70% discount, 19.00% yield
Miskay Boutique International – closed 21 Nov 2025
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180 days: 19.85% discount, 22.00% yield
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270 days: 20.74% discount, 24.50% yield
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360 days: 21.01% discount, 26.50% yield
Commercial paper is ideal for investors seeking stable, predictable short-term returns with minimal price volatility. It offers significantly higher yields than bank deposits especially in periods of market uncertainty.
However, CP may not be suitable if you:
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Need liquidity before maturity,
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Have low tolerance for issuer credit risk, or
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Prefer long-term investment horizons.
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