The Central Bank of Nigeria’s (CBN) bid to take management of the nation’s fixed-income market has triggered regulatory controversies in Nigeria’s {financial} sector.
Whereas the apex {bank} insists the transfer will improve transparency and effectivity, analysts and market operators warn that it dangers upsetting the stability between financial coverage oversight and capital market regulation.
Behind this institutional stress lies a revealing knowledge level: Nigeria’s top-tier banks, additionally referred to as the FUGAZ group (First HoldCo, UBA, GTCO, Entry Corp, Zenith), collectively invested N49.152 trillion in Securities and Treasury payments placements, in response to the {financial} statements filed with the Nigerian Change (NGX) Group.
Inside simply 9 months of 2025, the FUGAZ group poured N6.948 trillion in Securities and Treasury payments, 16.5% enhance over N42.204 trillion the banks had invested as of December 2024.
Nairametrics Analysis findings present that curiosity revenue from the funding securities stood at N4.8 trillion in 9 months of 2025, in contrast with N3.6 trillion within the corresponding interval of 2024.
A better take a look at the banks’ {financial} statements for the nine-month interval ended September 30, 2025, reveals how dominant the fixed-income section has develop into as a supply of revenue for Nigerian lenders.
With a reported mixed complete of N49.152 trillion invested in securities and treasury payments, the main banks embody Entry Company with N15.25 trillion; UBA with N13.59 trillion; Zenith Bank with N9.05 trillion; First HoldCo with N6.35 trillion; and GTCO with N4.91 trillion. These investments generated returns as follows:
These figures underscore how a lot banks depend on sovereign debt devices and CBN-backed placements, quite than riskier private-sector lending, to generate returns.
The development displays a broader shift in banking habits, from credit-driven progress towards passive revenue by authorities securities, pushed by excessive yields and macroeconomic uncertainty
Loans-to-deposit knowledge from the identical banks present a deliberate retreat from aggressive lending regardless of surging deposits.
In a current round issued late September 2025, the CBN introduced plans emigrate fastened revenue buying and selling and settlement features from the FMDQ Securities Change — regulated by the Securities and Change Fee (SEC) — to its personal Actual-Time Gross Settlement (RTGS) and Scripless Securities Settlement System (S4). This coverage shift is anticipated to kick off this November, barring last-minute reversals.
The transfer would successfully make the CBN each operator and regulator of Nigeria’s fixed-income market infrastructure, consolidating management of presidency bond and Treasury invoice issuances beneath one roof.
Supporters say the reform might improve transparency, scale back underreporting, and democratise entry by ending what many describe as FMDQ’s monopoly over the market. Critics, nonetheless, warn that the plan could represent regulatory overreach and commercialisation in violation of the CBN Act and the Investments and Securities Act (ISA) 2025.
Analysts and authorized consultants argue that whereas the CBN Act permits the {Bank} to advertise cost and settlement methods, it doesn’t authorise it to function a securities buying and selling venue.
The ISA 2025 provides unique regulatory authority over securities markets and buying and selling platforms to the SEC, not the central {bank}, analysts argue.
Dr. Akin Olaniyan, CEO of Lagos-based Charterhouse Restricted, mentioned, “If CBN implements its deliberate takeover with out SEC oversight, the transfer might create twin regulation, confuse market members, and undermine confidence in Nigeria’s market governance framework.”
Critics like pioneer Registrar of the Institute of Capital Markets Registrars (ICMR), Dr. Walker Ogogo, additionally famous that “the CBN’s involvement in buying and selling, settlement, and financial coverage might create conflicts of curiosity and ship incorrect sign to international buyers,” particularly because the CBN already owns about 16% fairness in FMDQ, a construction initially designed to advertise collaboration quite than competitors.
Market operators stay divided. David Adonri, CEO of Highcap Securities Restricted, agrees that the CBN is statutorily empowered to handle the first marketplace for authorities securities however not the secondary market, which falls beneath SEC’s jurisdiction.
He advised that dissatisfaction with FMDQ’s commerce transparency and reporting requirements could have triggered the CBN’s transfer, saying, “The CBN seems not comfy with how FMDQ executes its trades. That is about gaining visibility and management.”
“What they’re doing could even convey extra transparency as a result of at the moment, the info from FMDQ should not properly captured or are underreported,” Olayinka noticed.
Presently, FMDQ has unique entry to the CBN’s S4 system, making it the dominant platform for buying and selling and settlement of presidency securities.
Analysts imagine that when the CBN launches its proprietary system, each FMDQ and NGX will achieve equal entry to S4, thereby “democratising” the fastened revenue house.
“The event might take away the undue benefit beforehand loved by FMDQ,” Adonri mentioned, “permitting for higher worth discovery and wider investor participation.”
The CBN’s reform, although probably transformative, exams the boundaries of its authorized authority and the independence of Nigeria’s capital market establishments. Its success will depend upon transparency, collaboration, and regulatory alignment with the SEC.
