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.
How much N5 million earns in CPs
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;
181 days @ 16.10% (Dangote Cement discount rate)
- Gross interest: N399,191.78
- Net after 10% WHT: N359,272.60
265 days @ 16.70% (Dangote Cement discount rate)
- Gross interest: N606,232.88
- Net after 10% WHT: N545,609.59
364 days @ 18.38% (Daraju discount rate)
- Gross interest: N916,482.19
- Net after 10% WHT: N824,833.97
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.
How CP returns compare other short-term investments
- Nigerian Treasury Bills
Using the latest auction rates of 15.50% (182 days) and 17.50% (364 days), a N5 million placement delivers;
182 days @ 15.50%
- Gross interest = N387,500.00 (about N11,691 less than CPs)
- Net after 10% WHT = N348,750.00
- If NTB were tax-exempt (old claim): net = N387,500.00 (no WHT)
364 days @ 17.50%
- Gross interest = N875,000.00 (about N41,482 less than CPs)
- Net after 10% WHT = N787,500.00
- If NTB were tax-exempt: net = N875,000.00
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.
Stocks
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.
Recent CP opportunities in 2025
Although the market saw multiple CP issuances in November and December 2025, below are some of the issuances.
HillCrest Agro-Allied Industries Limited (Closing 16 Dec 2025)
- 182-day: 19.42% (discount), 21.50% implied yield
- 364-day: 19.69% (discount), 24.50% implied yield
Mecure Industries Plc (Closing 12 Dec 2025)
- 269-day: 18.1855% (discount), 21% implied yield
GLNG Funding SPV PLC (Closed 5 Dec 2025)
- 179-day: 18.2136% (discount), 20% implied yield
- 270-day: 18.9208% (discount), 22% implied yield
Daraju Industries (Closed 26 Nov 2025)
- 270-day: 18.55% (discount), 21.50% implied yield
- 364-day: 18.38% (discount), 22.50% implied yield
Dangote Cement Plc (Closed 19 Nov 2025)
- 181-day: 16.10% (discount), 17.50% implied yield
- 265-day: 16.70% (discount), 19.05% implied yield
A N5 million investment meets the typical minimum subscription size for institutional CPs and can deliver solid short-term returns, subject to issuer risk.
Why CPs are attractive in the current market
- High-rate environment: Many 2025 issuances offered double-digit yields far above deposit products.
- Short maturities: Tenors of 90–364 days offer quick capital turnover.
- Lower entry points via fintechs: Investors can now commit as low as N100,000, improving diversification.
Key Checks Before Selecting a CP
- Confirm CP programme is SEC-registered and quoted on FMDQ.
- Verify issuer credit ratings from GCR, DataPro, or Agusto.
- Assess liquidity — many CPs do not trade after issuance.
- Understand issuer fundamentals because CPs are unsecured.
How to Invest N5 Million in Commercial Paper
- Set up an investment account with a licensed broker or issuing house; CSCS details may be needed.
- Track available CPs via FMDQ quotes or broker announcements.
- Conduct issuer due diligence — credit rating, financial position, debt levels.
- Select a tenor aligned with your liquidity needs (180–360 days).
- Subscribe and fund at the discounted price.
- Hold or trade depending on whether secondary-market liquidity exists.
