The President of the Association of Issuing Houses of Nigeria (AIHN), Mrs Kemi Awodein, has averred that the sharp rise in benchmark interest rates by the Central Bank of Nigeria in 2024 strengthened investor confidence and redirected more capital into fixed-income securities, significantly lifting market activity and liquidity.
Awodein made the remarks in a statement released on Thursday night following the association’s Annual General Meeting and the unveiling of its 2024 financial report in Lagos.
In the statement obtained by The News Chronicle, she explained that the apex bank deployed steep monetary policy tightening to tame inflationary pressures and steady the financial system.
The association’s financial disclosures showed a rise in total funds and liabilities from N452.6 million in 2023 to N518.2 million in 2024.
Its total income expanded from N86.56 million to N123.6 million, while spending climbed from N50.08 million to N60.75 million. This produced surpluses of N36.4 million in 2023 and N62.9 million in 2024.
Speaking on market performance, she said: “Key drivers for fixed income instruments in 2024 included CBN’s aggressive interest rate hikes to combat inflation.
“There were significant interest rate hikes in February and March 2024, a total of 600 basis points.
“In 2024, CBN hiked the benchmark interest rate eight times and by 875 basis points to 27.5 per cent from 18.75 per cent at the beginning of the year.”
Awodein noted that although elevated rates limited private-sector issuances, they also attracted strong investor inflows and boosted market liquidity.
She pointed out that government borrowing skyrocketed, with sales of Open Market Operations (OMO) bills and Treasury bills jumping to N12.83 trillion in 2024 from N716.7 billion in 2023.
“Despite these challenges, as the year progressed, there was renewed investor confidence, driven by government policies and the anticipation of interest rate cuts in other markets.
“Significant in the year was the successful issuance of the first domestic dollar bond by the Debt Management Office,” she said.
Awodein said equity capital raising gained fresh momentum after the CBN’s recapitalisation directive issued in March 2024, leading several banks to conclude their transactions before the end of the year.
“Activity in the sector will continue in earnest in 2025 as the March 2026 deadline approaches,” she said.
She also highlighted Aradel Holdings Plc’s migration from the NASD platform to the Nigerian Exchange as a landmark move that broadened investor options and improved liquidity.
According to her, long-term debt fundraising remained weak due to the harsh interest-rate conditions, with most issuances dominated by Commercial Paper.
Among major deals were Seplat Energy’s 650 million dollar bond for expansion and Airtel Africa’s 500 million dollar raise to enhance telecoms infrastructure.
She added that by the close of 2024, banks such as Fidelity Bank, GTBank, Access Bank, FCMB and Zenith Bank had begun issuing capital instruments to meet new regulatory thresholds.
“Access Bank completed its recapitalisation in 2024, while other banks are expected to conclude their transactions before Q1 2026,” she said.
