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By Chukwuma Umeorah
The Association of Issuing Houses of Nigeria (AIHN) has said that the Central Bank of Nigeria’s aggressive interest rate hikes in 2024 have fundamentally reshaped investor behaviour, tilting the market sharply toward fixed-income instruments and altering the dynamics of both the debt and equity markets.
The President of AIHN, Kemi Awodein, speaking during AIHN’s Annual General Meeting and the presentation of the association’s 2024 financial statements in Lagos, explained that the apex bank relied on interest rate increases to tackle persistent inflationary pressures. “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), aimed at curbing inflation. In 2024, CBN hiked the benchmark interest rate eight times and by 875 basis points to 27.5 per cent in November from 18.75 per cent at the beginning of the year,” she said.
According to Awodein, private sector issuance activities were effectively crowded out, while government borrowing surged as authorities sought to manage liquidity in the financial system. “Data indicates that about N12.83tn in Open Market Operation bills and T-bills were sold compared to N716.7bn for the whole of 2023. Despite these challenges, as the year progressed, there was renewed investor confidence, leading to increased capital inflows. This was driven by government policies and the anticipation of interest rate cuts in other markets,” she added.
Meanwhile, the AIHN financial statements for 2024 reflected the broader growth in Nigeria’s investment landscape. Total funds and liabilities of the association grew from N452.6 million in 2023 to N518.2 million in 2024, while total income increased from N86.56 million to N123.6 million over the same period. Expenditure for the year stood at N60.75 million, generating a surplus of N62.9 million, compared with N36.4 million in 2023.
Beyond fixed income markets, activity in the equity segment of the investment banking sector also gained momentum, fueled in part by CBN’s recapitalisation directive announced in March 2024. “By year-end, a number of banking institutions had concluded transactions, with Access Bank Plc announcing the attainment of the new regulatory capital. The activity in the sector will continue in earnest in 2025 as the deadline of March 2026 approaches,” Awodein noted.
The transition of Aradel Holdings Plc from NASD to the Nigerian Exchange (NGX) further provided investment opportunities and enhanced market liquidity, she said. While long-term debt capital raises were muted due to high-interest rates and frequent government issuances, commercial paper remained the primary instrument for private sector debt capital mobilisation. Notable transactions in 2024 included Seplat Energy’s $650 million bond issuance aimed at expanding energy operations and Airtel Africa’s $500 million capital raise to enhance telecommunications infrastructure.
Awodein also highlighted the successful issuance of the first domestic dollar bond by the Debt Management Office as a key milestone in 2024. She emphasized that while high interest rates influenced the market’s structure, policy clarity and targeted interventions supported investor confidence. “Recapitalisation was completed at year’s end by Access Bank, with all banks being required to complete their respective transactions before the end of Q1 2026,” she said, adding that banks including Fidelity Bank, GTBank, Access Bank, FCMB, and Zenith Bank had undertaken issuances to meet new capital requirements.
