CBN May Backtrack on Fixed-Income Market Control as Nigeria Reviews Policy Shift
Nigeria’s plan to let the Central Bank of Nigeria (CBN) take over control of the nation’s fixed-income market may soon be reversed as government agencies review the proposal, according to a Bloomberg report citing people familiar with the matter. The move, which was scheduled to take effect in November, would have transferred trading and settlement functions for fixed-income and foreign-exchange transactions to the CBN.
Sources told Bloomberg that the finance ministry, the Securities and Exchange Commission (SEC), and the central bank are currently re-examining the proposal. Early indications suggest that the plan could be withdrawn within a month because existing laws do not grant the CBN authority to manage the market infrastructure directly. The CBN had earlier defended the proposal as a measure to improve transparency and efficiency in financial market operations.
Currently, Nigeria’s fixed-income instruments — including government bonds — are primarily traded on FMDQ OTC Plc, using a platform powered by Bloomberg LP. The Nigerian Exchange Limited (NGX) also handles fixed-income transactions. A spokesperson for the NGX confirmed that trading continues as usual, while the CBN, SEC, and FMDQ have not commented publicly on the review process.
The initial announcement had stirred unease among market participants who feared that centralising market control under the CBN could diminish the SEC’s regulatory oversight and concentrate too much power in the monetary authority. Analysts also warned that such a move might blur the boundaries between monetary policy execution and market regulation.
Nigeria’s fixed-income market, one of the largest in Africa, is vital for funding government debt and providing investment avenues for institutions and individuals. The SEC oversees capital market activities, while the CBN manages monetary policy and debt issuance — a balance that many stakeholders believe should remain distinct to sustain market confidence and investor trust.
source: Business day