The Central Bank of Nigeria (CBN)’s plan to take over control of the fixed-income market has stirred tension in the financial sector, with analysts warning that it could cause a clash between the CBN and the Securities and Exchange Commission (SEC).
The apex bank said the move would make bond trading more transparent and efficient. But market operators believe it may lead to overreach, since the SEC already regulates the capital market.
Nigeria’s biggest lenders — known as the FUGAZ group (First HoldCo, UBA, GTCO, Access Corp, and Zenith Bank), have continued to favour investment in government securities over private-sector lending.
Data from their filings with the Nigerian Exchange (NGX) show that as of September 2025, the five banks invested a total of ₦49.15 trillion in Treasury bills and bonds. This represents a 16.5% rise from ₦42.2 trillion at the end of 2024.
Within just nine months, the banks made ₦4.8 trillion in interest income from these investments, up from ₦3.6 trillion in the same period last year. The figures reveal how much banks rely on safer, CBN-backed instruments instead of riskier loans to businesses.
Why the CBN’s move is controversial
In a circular issued in late September, the CBN announced plans to move fixed-income trading and settlement from FMDQ Securities Exchange, which operates under SEC supervision, to its own settlement systems, the RTGS and Scripless Securities Settlement System (S4).
This means the CBN would act as both operator and regulator of government securities trading, a role some experts believe goes beyond its legal powers.
Dr. Akin Olaniyan, CEO of Charterhouse Limited, warned that the policy “could create confusion among investors and weaken trust in regulatory institutions.”
Read also: FCCPC Endorses CBN’s 48-Hour Refund Plan to Protect Bank Customers
However, some market watchers support the move. They argue that the CBN’s plan could fix issues of poor data reporting and transparency that have trailed the FMDQ platform.
At the heart of the controversy is a power struggle between two major regulators, the CBN and SEC, each claiming oversight of Nigeria’s fixed-income market.
While the CBN insists it is cleaning up the system to make data more accurate and trading more efficient, critics say it must work with the SEC to avoid duplication and maintain investor confidence.
Whether the reform strengthens the market or fuels regulatory tension will depend on how both institutions handle the transition in the months ahead.
Discover more from RainSMediaRadio
Subscribe to get the latest posts sent to your email.
