Feature/OPED
A Dangerous Concentration of Power: Is CBN’s Fixed Income Securities Takeover a Ticking Bomb for Nigeria’s Economy?
By Blaise Udunze
The Central Bank of Nigeria’s decision to take full control of government securities issuance has been described by some as a bold move toward transparency and market efficiency. Yet, beneath the surface of this reform lies a web of structural dangers that could tighten credit even further, push interest rates higher, escalate exchange-rate instability, trigger regulatory turf wars, and strangulate the private sector, especially small and medium enterprises (SMEs) that already struggle to survive in Nigeria’s high-cost economy.
The policy shift became more pronounced with the rollout of a new Treasury Bills (T-Bills) auction regime, mandating that all bids be submitted through the CBN’s S4 digital interface. This transition officially bypasses the longstanding Primary Dealer Market Maker (PDMM) framework and represents the clearest sign yet that the apex bank is asserting complete control over how government securities are issued, priced, and distributed. In fact, the first major test of this system will occur with the federal government’s planned N700 billion T-Bills issuance scheduled for November 20, 2025 which is an unprecedented rollout that effectively transfers auction power from market intermediaries directly to the CBN.
Analysts say this shift is not merely operational; it is structural. The S4 interface, which has existed since 2014 but never fully deployed as the primary submission platform, now becomes the exclusive gateway for government securities issuance. All bids, whether retail or institutional must be lodged through S4 between 8:00 a.m. and 11:00 a.m., with the CBN maintaining full discretion to adjust the offer amount or reject bids it considers inconsistent with market conditions. Settlement will occur within 24 hours.
According to market expert Tajudeen Olayinka, CEO of Wyoming Capital Partners, the policy “is consistent with the CBN’s signal that it would take charge of the primary segment of the fixed-income market where government securities are issued.” Another veteran dealer put it more bluntly: “With S4, no dealer can see what rate others are quoting. All bids now meet at the same window. This dismantles the old advantage PDMMs enjoyed.”
Although transparency is improved by removing dealers’ visibility over competing bids, concerns have intensified over the broader consequences of the CBN monopolizing the government securities market. The danger is that this reform which is unaccompanied by strong institutional coordination between the CBN, the DMO, and the Ministry of Finance could trigger deeper systemic imbalances.
One of the most pressing fears is the crowding-out effect. If the CBN aggressively issues more government securities as part of its liquidity-management operations, banks, already heavily invested in government debt, will divert even more of their portfolios toward these risk-free instruments rather than lending to the real economy.
Nigeria’s top five banks known as the FUGAZ group (First HoldCo, UBA, GTCO, Access Corp, and Zenith Bank) provide compelling evidence of this shift. Their financial statements show a combined N49.152 trillion investment in securities and Treasury Bills as of September 2025, a sharp rise from N42.204 trillion at the end of 2024. In just nine months, they added nearly N7 trillion to these holdings.
Interest income from these investments surged by 33 percent, hitting N4.8 trillion in the first nine months of 2025 compared to N3.6 trillion in the same period of 2024.
– Access Corporation led the pack with N15.25 trillion in securities holdings,
– followed by UBA with N13.59 trillion,
– Zenith at N9.05 trillion,
– First HoldCo with N6.35 trillion, and
– GTCO at N4.91 trillion.
These investments generated robust returns: Access earned N1.3 trillion; Zenith N1.14 trillion; UBA N1.03 trillion; FBN HoldCo N720 billion; and GTCO N570 billion.
For analysts, these numbers expose a structural vulnerability as Nigerian banks are quickly transforming into large-scale government lenders rather than engines of private-sector credit. As Dr. Muktar Mohammed of Lagos Business School explains, “Banks have found refuge in government instruments because they are safe, liquid, and yield high returns in a volatile economy, but this behaviour constrains credit growth to the real sector.”
Lending data confirms this.
– Zenith Bank’s loan-to-deposit ratio slipped from 43 to 40 percent;
– Access Corporation maintained a flat 41.2 percent despite rising deposits;
– UBA’s ratio dropped to 28.2 percent;
– GTCO’s remained stagnant; and only
– First HoldCo showed notable improvement.
This trend is dangerous. Nigeria’s private sector, especially SMEs is already starved of credit. Lending rates hover between 28 percent and 35 percent, making capital unaffordable for most small businesses.
With the CBN taking full control of securities issuance, the likelihood is high that more liquidity will be absorbed through T-Bills and OMO bills, pushing interest rates further upward. The more attractive government securities become, the less incentive banks will have to lend to SMEs. This is how economies slide into cycles of low productivity, high unemployment, and weak domestic investment.
The implications do not end there. Excessive issuance of government securities could also destabilize the exchange rate. When interest rates remain artificially high to attract foreign portfolio investors into T-Bills, Nigeria becomes dependent on “hot money” which turns out to be short-term foreign inflows that exit the economy at the slightest shock. This pattern has historically triggered sharp naira depreciation, panic in the FX markets, and severe liquidity shortages in the banking sector. If the CBN uses this securities-controlled regime to sustain high yields, Nigeria risks attracting unstable capital inflows that will exit rapidly, putting pressure on the naira.
Beyond monetary and credit risks, there is a troubling regulatory dimension. The CBN’s move to migrate fixed-income trading and settlement from the FMDQ Securities Exchange, which is under SEC oversight to its own Real-Time Gross Settlement (RTGS) and S4 platforms has ignited a full-blown turf war between the CBN and the Securities and Exchange Commission.
Under the Investments and Securities Act (ISA) 2025, the SEC holds exclusive authority over trading venues. Critics warn that the CBN’s attempt to operate exchange-like infrastructure violates statutory boundaries and risks destabilizing the market.
Dr. Akin Olaniyan, CEO of Charterhouse Limited, described the move as “a potential recipe for dual regulation and confusion,” arguing that it may undermine investor confidence. Similarly, Dr. Walker Ogogo, pioneer Registrar of the Institute of Capital Market Registrars, noted that since the CBN already owns 16 percent of FMDQ, operating parallel infrastructure creates conflicts of interest that send negative signals to foreign investors.
MoneyCentral reports that the migration could trigger a 67 percent drop in FMDQ’s trading volume, weakening a system that has long supported Nigeria’s fixed-income ecosystem.
Veteran banker Victor Ogiemwonyi stated, “the CBN is not an exchange; it should not be involved in issuing, dealing, and settling securities. Conflating these roles creates unnecessary risk.” His concerns are grounded in the principle that market operators must be independent from regulators to prevent conflicts of interest. The CBN’s dual role as both regulator and operator blurs these lines and may set a dangerous precedent.
The real casualties of these structural conflicts will be SMEs and the broader private sector. These enterprises rely on bank credit to fund inventory, acquire machinery, expand operations, and withstand economic shocks. When banks prefer government securities over lending,
– SMEs face higher rates,
– stricter collateral requirements,
– fewer loan products, and shorter tenors.
– Many will be forced to downsize, lay off workers, or close altogether.
In an economy where SMEs account for over 90% of jobs, this contraction would be disastrous.
Another major overarching risk is that:
– The CBN’s consolidation of securities issuance power without corresponding checks from the DMO and Ministry of Finance creates an unbalanced financial architecture where monetary priorities overshadow fiscal realities and private-sector growth.
– Policies crafted in silos rarely produce macroeconomic stability. They produce distortions, uncertainty, and systemic fragility.
Nigeria stands at a critical junction. Securities issuance can be made transparent without centralizing all power in the CBN. Fixed-income markets can be cleaned up without dismantling the institutional balance that preserves confidence. What the country needs is coordination, not consolidation; collaboration, not domination.
If the CBN continues its takeover without robust guardrails, the result may be a financial system where banks stop lending, SMEs continue to collapse, interest rates remain high, the naira stays volatile, and regulatory conflicts scare away both local and foreign investors.
To avoid the dangerous risks ahead, Nigeria must:
- Strengthen collaboration between CBN, DMO, and Ministry of Finance. Debt issuance must reflect both monetary and fiscal realities not just liquidity needs.
- Prioritize long-term bonds over short-term T-Bills. This reduces rollover risk and provides stable funding at lower long-term cost.
- Implement SME-focused credit interventions through private banks, not direct CBN lending. Monetary policy should not attempt to replace commercial banking.
- Reduce government’s domestic borrowing needs. This requires fiscal reforms, spending discipline, and revenue expansion not more debt.
- Protect private-sector credit allocation. Regulators should discourage excessive bank investment in government securities.
Without these safeguards, the economy risks tilting dangerously toward monetary domination and private-sector suffocation.
The gains of transparency cannot come at the cost of institutional imbalance. Nigeria’s economic recovery depends on a thriving private sector, not an expanding government debt market. The central bank must not become the single most powerful issuer, dealer, regulator, and judge in its own market. That path leads not to stability but to systemic risk, risk that Nigeria’s fragile economy can ill afford.
Meanwhile, it is important for CBN to provide clarity on the economic rationale behind this centralisation of power. The CBN must come forward to justify how this shift will tangibly benefit the economy, particularly in the areas most sensitive to credit availability, financial stability and stability for Nigeria’s broader economy.
Blaise, a journalist and PR professional writes from Lagos, can be reached via: bl***********@***il.com
By Jerome-Mario Utomi
There are moments in the life of a nation when leadership is measured not merely by the ability to command institutions but by the courage to transform them. Such moments demand more than administrative competence; they require vision, strategic communication, and an unwavering commitment to rebuilding public confidence. The keynote address delivered on behalf of the Inspector-General of Police (IGP), Mr Olatunji Rilwan Disu, at the Lagos PR Fest 2026 grand finale was one of such defining moments.
Held at the iconic MUSON Centre, Onikan, Lagos, the event transcended the boundaries of a conventional police engagement. It became a national conversation on security, governance, public trust, and the indispensable role of strategic communication in nation-building.
More importantly, the IGP, who was represented at the event by AIG Simeon Udofia Akpanudom, Head of the Force Criminal Investigation Department (FCID) Annex, Alagbon Close, Ikoyi, revealed a policing philosophy that is quietly but deliberately redefining the image and operational culture of the Nigeria Police Force.
For decades, public perception of policing in Nigeria has largely been shaped by mistrust, misunderstanding, and an unfortunate history of strained relations between citizens and law enforcement agencies. While successive administrations have introduced reforms, many struggled to address the most fundamental ingredient of effective policing-public trust.
IGP Disu appears determined to confront that challenge from an entirely different perspective.
His declaration that “security is everyone’s business” was not a rhetorical flourish. It was a profound statement of intent. It reflected an understanding that sustainable security cannot be achieved through coercion alone but through partnership, inclusion, transparency, and continuous engagement with the people. Indeed, what the IGP has introduced is more than institutional reform. It is a comprehensive rebranding of policing itself.
Unlike cosmetic rebranding that focuses on uniforms, slogans, or public ceremonies, this initiative is rooted in changing institutional culture and public perception simultaneously. It seeks to replace fear with confidence, suspicion with collaboration, and silence with meaningful dialogue.
The brilliance of this approach lies in its recognition that trust is not demanded; it is earned.
Throughout the keynote, the IGP consistently emphasised evidence-based communication, accountability, and transparency as pillars upon which public confidence must be rebuilt. At a time when misinformation travels faster than facts, and public institutions are constantly subjected to intense scrutiny, his insistence that policing should be supported by credible information rather than propaganda reflects both wisdom and contemporary relevance.
Perhaps nowhere is this transformation more visible than in the establishment and expansion of the Violent Crimes Response Unit (VCRU). Rather than allowing achievements to remain hidden within internal reports, the Nigeria Police Force is increasingly communicating measurable outcomes, demonstrable operational effectiveness, and encouraging independent public assessment.
This deliberate openness and transparency represent a significant departure from the communication style traditionally associated with many security institutions.
Equally commendable is the renewed emphasis on accessible channels for complaints, feedback and citizen engagement. Every modern democratic institution understands that accountability strengthens authority rather than weakening it. By inviting public scrutiny instead of avoiding it, the Nigeria Police under IGP Disu is gradually redefining what institutional confidence should look like. The Inspector-General deserves particular commendation for recognising that public relations is not an appendage to policing but an operational necessity.
Far too often, public relations is misunderstood as image laundering or crisis management. In reality, effective public relations is about building relationships, creating understanding, managing expectations, and sustaining credibility. It is this broader and more professional understanding that permeated the Inspector-General’s address.
His decision to engage public relations professionals at Lagos PR Fest was therefore highly symbolic. It demonstrated that security communication must evolve beyond press statements announcing arrests or crime statistics. It must become a continuous conversation with citizens, communities, opinion leaders, professional bodies, and the media.
Equally remarkable is the renewed focus on community policing and the revitalisation of the Police Community Relations Committee (PCRC). These initiatives acknowledge an enduring truth: communities understand their security challenges better than distant bureaucracies.
By encouraging local participation, youth engagement, religious leaders, traditional institutions, and civil society organisations to become active stakeholders, the Nigeria Police is moving policing closer to the people it serves.
This approach is consistent with successful policing models across the world where intelligence flows more freely because communities trust law enforcement agencies enough to share information.
The emphasis on participatory campaigns such as “Security is Everyone’s Business” and “If you see something, say something” further reinforces this philosophy. These messages wisely redefine every citizen from being a passive observer into an active contributor to national security.
That represents strategic public relations at its finest. Perhaps the most compelling dimension of the Inspector General’s address is his deliberate connection between policing and nation-building.
Security does not exist in isolation. It supports economic growth, encourages investment, protects democratic institutions, and creates the stability necessary for social development. Safe highways promote commerce. Secure schools guarantee educational continuity. Protected communities attract investment. Professional law enforcement strengthens constitutional governance.
Viewed through this broader lens, policing becomes an essential instrument of national development rather than merely an agency of law enforcement. The Inspector-General’s appeal for “Nigeria First” narratives equally deserves commendation. In an era characterised by misinformation, polarisation, and divisive narratives, institutions must intentionally promote messages that unite rather than divide.
Strategic communication has become an important national asset. This is where professional public relations practitioners have an enormous responsibility. Their expertise extends beyond media visibility to fostering social cohesion, encouraging responsible public discourse, and strengthening confidence in democratic institutions.
The Nigerian Institute of Public Relations (NIPR), therefore, occupies a strategic position in supporting this national assignment.
Naturally, scepticism remains understandable. Public confidence, once diminished, cannot be restored overnight. Institutional reforms require consistency, measurable outcomes, and sustained leadership commitment.
Fortunately, the Inspector-General himself demonstrated refreshing realism by acknowledging that rebuilding trust remains an ongoing process. That honesty itself strengthens credibility.
His clearly articulated roadmap-rebuilding institutional credibility through transparency, strengthening community intelligence through grassroots participation, and promoting national cohesion through coordinated communication-provides a practical framework for long-term institutional renewal.
Importantly, these objectives align with internationally recognised principles of democratic policing. What distinguishes the current leadership is the willingness to place communication at the very centre of institutional transformation rather than treating it as an afterthought.
Leadership is often remembered less for the challenges inherited than for the direction established. Judging from the philosophy articulated at Lagos PR Fest 2026, IGP Disu is laying the foundation for a policing model that recognises that legitimacy derives not only from constitutional authority but from public confidence.
That distinction is profound. A police force may possess legal powers, but without public trust those powers become increasingly difficult to exercise effectively. Conversely, when citizens willingly cooperate, volunteer intelligence, respect lawful authority, and see themselves as partners, security becomes collective rather than confrontational.
That appears to be the future envisioned by the Inspector-General. His concluding appeal that all stakeholders must work together in transparency, accountability, and shared responsibility captures the essence of democratic policing in the twenty-first century.
Ultimately, the significance of the Lagos PR Fest address extends far beyond one conference or one keynote presentation. It represents a declaration that the Nigeria Police Force is prepared to measure success not only by arrests made or crimes prevented but also by relationships built, confidence restored, and communities united.
For me, the recent elevation by the IGP and express approval by the Nigerian Police Service Commission of some senior officers to the rank of Assistant Inspectors-General of Police (AIGs). Commissioners of Police (CPs) and others truly proves beyond reasonable doubt that the IGP is a man who understands that professionalism, strategic thinking and operational excellence are the defining features of global policing. In fact, analysts in particular and Nigerians of goodwill in general are beginning to view the recent appointment of IGP Disu as a very huge blessing to the nation.
If sustained with consistency, integrity, and measurable performance, this strategic shift may well become one of the most consequential institutional reforms in contemporary Nigeria. For at the heart of every peaceful nation lies a simple but enduring truth: security thrives where trust flourishes.
By placing strategic public relations at the centre of policing, IGP Disu has demonstrated an appreciation of that timeless principle. In doing so, he has presented Nigerians with something far more valuable than a communication strategy. He has presented a vision.
A vision in which the police badge symbolises not fear but reassurance; not distance but partnership; not mere authority but earned legitimacy. That is a vision worthy of national support, thoughtful reflection, and sustained implementation.
Utomi, a media specialist, writes from Lagos, Nigeria. He can be reached via Je*********@***oo.com/08032725374
By Gloria Onosode
For generations, conventional financial advice has treated debt like a trap — a final, desperate resort for emergency cash or a slippery slope toward financial instability. But as Nigeria’s economic terrain evolves, this defensive mindset is changing. Progressive business leaders, entrepreneurs, and forward-thinking individuals are realising that it can be an important financial tool for achieving personal or business objectives when used responsibly and within one’s repayment capacity.
To build a sustainable financial future, we must change our relationship with credit. Borrowing shouldn’t be a cycle of survival; it should form part of a broader financial plan designed to support sustainable growth. The secret lies in masterfully understanding borrowing for productive purposes and learning how to leverage purposeful borrowing to hit your most ambitious milestones.
At its core, the difference between constructive and destructive borrowing comes down to one fundamental principle: what does the cash do once it lands in your account?
Bad debt funds depreciating lifestyle assets or temporary consumption. Borrowing to buy luxury clothing, fund a lavish party, or upgrade to a consumer gadget that does not increase your income simply pulls future earnings forward to pay for a fleeting present moment. It drains cash flow without offering a return.
Conversely, good debt acts as an investment in your future self or your company. It is capital deployed to acquire assets, increase productivity, or generate recurring revenue that far outpaces the cost of the interest. When you borrow to buy a delivery truck for your logistics company, stock up on inventory ahead of a peak retail season, or fund a specialised certification, you aren’t spending money — you are investing in assets that may contribute to increased productivity and income generation.
When integrated into a clear, long-term plan, purposeful loans may enable eligible borrowers to respond more quickly to business opportunities that would otherwise take years to save for. For small and medium enterprises (SMEs), cash-flow timing mismatches are the silent killers of momentum. You might get a massive corporate purchase order but lack the immediate working capital to fulfil it. Waiting weeks to organically pool cash from existing revenue means losing the contract. Appropriately structured commercial financing can help businesses address temporary working-capital gaps, ensuring that viable opportunities turn into realised revenue.
In inflation-heavy environments, waiting to save up the full purchase price for vital business assets like manufacturing machinery, solar power installations, or commercial vehicles can backfire, as equipment costs often outpace savings rates. By using asset-backed financing, you can acquire the equipment today, put it to work immediately, and allow the asset to generate revenue that may contribute towards financing costs over time.
Investment in skills and capacity development can generate significant long-term benefits. Utilising credit to fund high-value education, technical upskilling, or operational training directly expands your earning capacity. The resultant career advancement or business efficiency multiplies your income potential for decades to come.
Shifting from a defensive borrowing stance to a wealth-creation strategy requires strict financial discipline. Truly responsible borrowing is anchored in three non-negotiable practices.
First, borrow only for a productive purpose. It can be tempting to redirect a portion of a business loan toward personal expenses. Resist the urge; borrowed funds should be applied primarily to the purpose for which the financing was obtained.
Second, know your repayment runway before you sign. Borrowing decisions should be supported by realistic cash-flow planning and repayment capacity assessments. Review your cash-flow data, factor in market fluctuations, and map out exactly how the investment will generate the funds needed to clear the balance.
Finally, prioritise speed and transparency. In today’s fast-moving market, opportunity doesn’t wait for weeks of manual paperwork. Borrowing decisions should be supported by realistic cash-flow planning and repayment capacity assessments that offer transparent pricing with no hidden fees, giving you the clarity needed to compute your precise cost of capital.
When you strip away the historical stigma surrounding credit, you find that borrowing is simply a neutral financial tool. In the hands of an undisciplined spender, it creates friction, but in the hands of a strategic planner, it can support business growth and financial planning when used responsibly.
As you look toward your next major milestone — whether that is expanding your storefront, digitising your corporate supply chain, or acquiring productive assets — Before taking on any borrowing commitment, carefully assess your financing needs, repayment capacity, and long-term financial objectives. Instead, ask yourself if your business can afford the cost of standing still. When used responsibly, purpose-driven credit can support individuals and businesses in achieving sustainable financial goals.
Responsible borrowing also means understanding that credit creates a legal repayment obligation. Borrowers should carefully assess affordability, understand all applicable charges, and avoid taking on debt beyond their repayment capacity.
Gloria Onosode is the Director of Enterprise Sales at FairMoney Business
By Winston Osuchukwu
Africa’s financial infrastructure is entering a defining phase. Digital adoption continues to accelerate, financial inclusion is deepening, and institutions across the ecosystem are investing in connected, data-driven services. According to the World Bank’s Global Findex Database, account ownership across Sub-Saharan Africa has expanded significantly over the past decade, while mobile money continues to process hundreds of billions of dollars annually. Sustained investment in Africa’s fintech ecosystem reflects the same growing confidence in the continent’s financial future.
As the ecosystem matures, success will depend less on isolated innovation and more on how institutions connect their capabilities. The next phase of financial infrastructure is being shaped by three interdependent pillars: connected ecosystems that widen the data available on each customer, data intelligence that turns that scattered data into a single coherent picture, and intelligent decision-making that turns insight into measurable outcomes.
Connected Ecosystems Create the Foundation for Intelligence
No single institution has a complete view of the financial ecosystem. Banks, fintechs, payment providers, telecommunications companies, regulators, and other participants each contribute different pieces of the picture. As these organisations become more connected through interoperable payment systems, shared infrastructure, and collaborative partnerships, financial services become more accessible and seamless for individuals and businesses alike.
Connectivity alone, however, is not enough. A more connected ecosystem also creates exponentially more data, and unless that information can be integrated and interpreted consistently, greater connectivity simply produces greater complexity. The value of collaboration therefore depends on the ability to transform fragmented information into a coherent picture.
Data Intelligence Creates Shared Understanding
Once data flows across connected ecosystems, the next challenge is making sense of it. Financial institutions need more than access to information; they need the ability to unify diverse data sources, identify meaningful patterns, and generate insights that accurately reflect customer behaviour, operational performance, and emerging risks.
Data intelligence provides this common understanding. It enables institutions to move beyond isolated datasets and develop a trusted, enterprise-wide view that supports regulatory compliance, operational efficiency, and customer-centric innovation. Yet even the clearest insight has limited value if it remains descriptive. Understanding what is happening is only useful when institutions can confidently decide what to do next.
Intelligent Decisions Drive Real Outcomes
This is where artificial intelligence, predictive analytics, and machine learning become transformative. Built on a foundation of connected ecosystems and high-quality data intelligence, these technologies enable organisations to make faster, more consistent decisions across lending, fraud detection, compliance, customer engagement, and strategic planning.
Rather than replacing human expertise, intelligent decision-making augments it by helping institutions anticipate change, respond proactively, and allocate resources more effectively. When decisions are powered by reliable data and supported by a connected financial ecosystem, organisations become more resilient, customers enjoy better experiences, and the entire financial value chain operates more efficiently.
Africa’s financial future will not be shaped by technology or data in isolation. Progress requires that these capabilities work together. Connected ecosystems generate the information. Data intelligence transforms that information into “features” – the meaningful attributes of a customer’s behaviour that a model can learn from. Intelligent decision-making algorithms then convert those “features” into action. Together, they form the foundation of a financial infrastructure that is more inclusive, resilient, and capable of supporting sustainable economic growth.
At Mathesis Analytics, we turn information into action – helping financial institutions transform complex and frequently unstructured data into meaningful insights they can act on – helping financial institutions make sense of complex, fragmented data and lend confidently to the people and businesses driving Africa’s economy.
Winston Osuchukwu is the Founder and CEO of Mathesis Analytics Inc.
