Nigeria: CBN’s Aggressive Monetary Tightening Fuels Fixed-Income Market Surge — AIHN

The Association of Issuing Houses of Nigeria (AIHN) says the Central Bank of Nigeria’s (CBN) aggressive monetary tightening in 2024 was the key catalyst behind the heightened appetite for fixed-income instruments across the market.

Speaking at the association’s Annual General Meeting and presentation of its 2024 financial statements in Lagos, AIHN President, Kemi Awodein, noted that sustained rate hikes throughout the year reshaped investor behaviour and market activity.

The CBN’s Monetary Policy Committee raised the benchmark interest rate eight times, totalling 875 basis points, pushing rates from 18.75% in January to 27.5% by November 2024—one of the steepest tightening cycles in recent history.

Awodein explained that the sharp rise in rates redirected liquidity toward government securities, crowding out private-sector issuances.
According to her, issuance volumes reflected this shift:

• ₦12.83 trillion in OMO bills and Treasury bills were sold in 2024, compared with just ₦716.7 billion for the whole of 2023.

Despite the challenging conditions, investor confidence strengthened later in the year, supported by improved policy signals and expectations of easing in global markets. This, she said, contributed to renewed capital inflows and a number of landmark transactions, including the Debt Management Office’s first domestic dollar bond issuance.

Awodein added that investment banking activity also benefited from the CBN’s March 2024 announcement on bank recapitalisation. Several banks concluded capital-raising programmes by year-end, with Access Bank Plc becoming the first to meet the new regulatory capital threshold. More issuances are expected through 2025 ahead of the March 2026 recapitalisation deadline.

She highlighted other market milestones, including Aradel Holdings Plc’s migration from the NASD platform to the Nigerian Exchange, which improved liquidity and expanded opportunities for investors.

Long-term debt capital raising remained subdued due to the high-interest environment and frequent Federal Government issuances, leaving the private sector with limited space. As a result, debt activities were largely concentrated in commercial paper programmes. Key 2024 transactions included:

• Seplat Energy’s $650 million bond issuance, and

• Airtel Africa’s $500 million capital raise to bolster telecoms infrastructure.

On the fiscal side, AIHN’s 2024 financial performance showed resilience, with total funds and liabilities rising from ₦452.6 million (2023) to ₦518.2 million (2024). Total income grew to ₦123.6 million, while expenditure reached ₦60.75 million, resulting in a ₦62.9 million surplus, up from ₦36.4 million the previous year.