President, Association of Issuing Houses of Nigeria (AIHN), Mrs Kemi Awodein, 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.
Awodein stated this in a statement issued on Thursday night after the association’s Annual General Meeting and 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 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, 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 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 (OMO) 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 said equity capital raises gained momentum following the March 2024 recapitalisation directive by the CBN, 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.
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 dollar bond for expansion and Airtel Africa’s 500 million dollar capital raise to strengthen 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 toward meeting 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)
