A well-timed N5 million investment in commercial paper (CP) now delivers some of the strongest short-term returns in Nigeria, outpacing most Treasury Bills (NTBs) and money-market alternatives.
With discount rates still elevated in the final quarter of 2025, CPs are among the few fixed-income instruments offering positive real returns, making them especially attractive for investors seeking safety, liquidity, and high yields.
Using Dangote Cement’s November 2025 discount rates (16.10% for 181 days and 16.70% for 265 days), a N5 million placement would deliver;
These yields remain elevated because CP issuers continue to price aggressively in a tight monetary environment. With inflation easing and monetary policy expected to loosen in 2026, locking in 270–364-day CPs now allows investors to secure today’s higher rates well into mid-2026, when yields may trend lower.
Using the latest auction rates of 15.50% (182 days) and 17.50% (364 days), a N5 million placement delivers;
Previously tax-exempt short-term instruments are now subject to a 10% withholding tax on interest, following the FIRS directive in October 2025; investors should therefore compare net-of-tax returns when choosing between CPs and NTBs.
If N5 million had been invested in a stock like Zenith Bank 6 months (180 days) ago and delivered a similar 16.10% return, the gain would be N805,000, notably higher than the 181-days CP return.
However, equities carry price volatility risk. A +16% return could easily be a −16% loss. While CPs carry credit risk, they are unsecured and make issuer quality critical.
For investors prioritizing stability and predictable cash flows, CPs remain the more conservative choice.
Although the market saw multiple CP issuances in November and December 2025, below are some of the issuances.
A N5 million investment meets the typical minimum subscription size for institutional CPs and can deliver solid short-term returns, subject to issuer risk.