CBN interest rate hikes boost fixed-income market demand

Kemi Awodein, president of the Association of Issuing Houses of Nigeria, says the Central Bank of Nigeria’s aggressive interest rate hikes helped stabilise investor confidence and channel more funds into fixed-income instruments in 2024, boosting market participation and liquidity.
Mr Awodein said this in a statement on Thursday night, following the association’s Annual General Meeting and the presentation of the 2024 financials in Lagos.
She said the apex bank relied on steep rate adjustments to contain inflation and restore balance to the financial markets.
The AIHN financials showed that total funds and liabilities rose from N452.6 million in 2023 to N518.2 million in 2024.
Total income grew from N86.56 million to N123.6 million within the same period, while expenditure increased from N50.08 million to N60.75 million, resulting in surpluses of N36.4 million in 2023 and N62.9 million in 2024.
Highlighting the dynamics of the fixed-income market, 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, totaling 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.”
Ms Awodein noted that while the high-interest environment crowded out private-sector issuances, it also strengthened investor inflows and improved liquidity. She added that government borrowing surged, with Open Market Operations bills and Treasury bills sales rising sharply to N12.83 trillion in 2024, compared with 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.
The AIHN boss stated that equity capital raises gained momentum following the CBN’s March 2024 recapitalisation directive, with several banks concluding transactions by year-end.
“Activity in the sector will continue in earnest in 2025 as the March 2026 deadline approaches,” she said.
Ms Awodein also cited Aradel Holdings Plc’s transition from NASD to the Nigerian Exchange as a major milestone that expanded investment opportunities and deepened liquidity. She added that long-term debt capital raising remained subdued due to the high-rate environment, with most activities concentrated in Commercial Paper issuances.
Notable transactions included Seplat Energy’s $650 million bond issue for expansion and Airtel Africa’s $500 million capital raise to strengthen its telecoms infrastructure.
According to her, by the end of 2024, banks such as Fidelity Bank, GTBank, Access Bank, FCMB, and Zenith Bank had initiated issuances to meet new capital requirements.
“Access Bank completed its recapitalisation in 2024, while other banks are expected to conclude their transactions before Q1 2026,” she said.
(NAN)
We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.
More from Peoples Gazette

Agriculture
FG tasks ECOWAS on leveraging financing strategies for agroecology
The federal government has urged stakeholders in the agriculture and finance sectors in the West Africa region to leverage financing strategies to enhance agroecology practices

Politics
Katsina youths pledge to deliver over 2 million votes to Atiku
“Katsina State is Atiku’s political base because it is his second home.”

States
Police arraign two for stealing trailer battery in Ibadan
According to the prosecutor, the defendants were eventually arrested following a police investigation.

Education
Community lauds UNICEF, partners for project in Aleita
Community members in Aleita, Abuja municipal council, have commended UNICEF for providing the eco-friendly toilet project at L.E.A. Primary School, Aleita.

Africa
Egypt establishes world’s largest date plantation with 2.3 million trees
Egypt has begun establishing the world’s largest date plantation, with a total of 2.3 million palm trees to be planted in the Toshka and Al-Owainat regions.

Health
Gov. Soludo’s wife warns junk foods fuelling diabetes in Nigeria
The governor’s wife urged Nigerians to adopt healthier lifestyles as a key step to reducing the growing burden of diabetes in the country.

Politics
We won’t obey court order, Ibadan national convention sacrosanct: PDP
The Peoples Democratic Party says the conduct of its national convention on Saturday in Ibadan is sacrosanct.

Agriculture
South Africa’s citrus exports rise by record 22% in 2025
This initiative is projected to create an additional 100,000 jobs and increase foreign currency inflows into South Africa’s economy.






