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A dangerous Concentration of Power: Is CBN’s Fixed Income Securities Takeover a Ticking Bomb for Nigeria’s Economy?

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By Blaise Udunze

The Central Bank of Nigeria’s decision to take full control of government securities issuance has been described by some as a bold move toward transparency and market efficiency. Yet, beneath the surface of this reform lies a web of structural dangers that could tighten credit even further, push interest rates higher, escalate exchange-rate instability, trigger regulatory turf wars, and strangulate the private sector, especially small and medium enterprises (SMEs) that already struggle to survive in Nigeria’s high-cost economy.

The policy shift became more pronounced with the rollout of a new Treasury Bills (T-Bills) auction regime, mandating that all bids be submitted through the CBN’s S4 digital interface. This transition officially bypasses the longstanding Primary Dealer Market Maker (PDMM) framework and represents the clearest sign yet that the apex bank is asserting complete control over how government securities are issued, priced, and distributed. In fact, the first major test of this system will occur with the federal government’s planned N700 billion T-Bills issuance scheduled for November 20, 2025 which is an unprecedented rollout that effectively transfers auction power from market intermediaries directly to the CBN.

Analysts say this shift is not merely operational; it is structural. The S4 interface, which has existed since 2014 but never fully deployed as the primary submission platform, now becomes the exclusive gateway for government securities issuance. All bids, whether retail or institutional must be lodged through S4 between 8:00 a.m. and 11:00 a.m., with the CBN maintaining full discretion to adjust the offer amount or reject bids it considers inconsistent with market conditions. Settlement will occur within 24 hours.

According to market expert Tajudeen Olayinka, CEO of Wyoming Capital Partners, the policy “is consistent with the CBN’s signal that it would take charge of the primary segment of the fixed-income market where government securities are issued.” Another veteran dealer put it more bluntly: “With S4, no dealer can see what rate others are quoting. All bids now meet at the same window. This dismantles the old advantage PDMMs enjoyed.”

Although transparency is improved by removing dealers’ visibility over competing bids, concerns have intensified over the broader consequences of the CBN monopolizing the government securities market. The danger is that this reform which is unaccompanied by strong institutional coordination between the CBN, the DMO, and the Ministry of Finance could trigger deeper systemic imbalances.

One of the most pressing fears is the crowding-out effect. If the CBN aggressively issues more government securities as part of its liquidity-management operations, banks, already heavily invested in government debt, will divert even more of their portfolios toward these risk-free instruments rather than lending to the real economy.

Nigeria’s top five banks known as the FUGAZ group (First HoldCo, UBA, GTCO, Access Corp, and Zenith Bank) provide compelling evidence of this shift. Their financial statements show a combined N49.152 trillion investment in securities and Treasury Bills as of September 2025, a sharp rise from N42.204 trillion at the end of 2024. In just nine months, they added nearly N7 trillion to these holdings.

Interest income from these investments surged by 33 percent, hitting N4.8 trillion in the first nine months of 2025 compared to N3.6 trillion in the same period of 2024.

–       Access Corporation led the pack with N15.25 trillion in securities holdings,

–       followed by UBA with N13.59 trillion,

–       Zenith at N9.05 trillion,

–       First HoldCo with N6.35 trillion, and

–       GTCO at N4.91 trillion.

These investments generated robust returns: Access earned N1.3 trillion; Zenith N1.14 trillion; UBA N1.03 trillion; FBN HoldCo N720 billion; and GTCO N570 billion.

For analysts, these numbers expose a structural vulnerability as Nigerian banks are quickly transforming into large-scale government lenders rather than engines of private-sector credit. As Dr. Muktar Mohammed of Lagos Business School explains, “Banks have found refuge in government instruments because they are safe, liquid, and yield high returns in a volatile economy, but this behaviour constrains credit growth to the real sector.”

Lending data confirms this.

–       Zenith Bank’s loan-to-deposit ratio slipped from 43 to 40 percent;

–       Access Corporation maintained a flat 41.2 percent despite rising deposits;

–       UBA’s ratio dropped to 28.2 percent;

–       GTCO’s remained stagnant; and only

–       First HoldCo showed notable improvement.

This trend is dangerous. Nigeria’s private sector, especially SMEs is already starved of credit. Lending rates hover between 28 percent and 35 percent, making capital unaffordable for most small businesses.

With the CBN taking full control of securities issuance, the likelihood is high that more liquidity will be absorbed through T-Bills and OMO bills, pushing interest rates further upward. The more attractive government securities become, the less incentive banks will have to lend to SMEs. This is how economies slide into cycles of low productivity, high unemployment, and weak domestic investment.

The implications do not end there. Excessive issuance of government securities could also destabilize the exchange rate. When interest rates remain artificially high to attract foreign portfolio investors into T-Bills, Nigeria becomes dependent on “hot money” which turns out to be short-term foreign inflows that exit the economy at the slightest shock. This pattern has historically triggered sharp naira depreciation, panic in the FX markets, and severe liquidity shortages in the banking sector. If the CBN uses this securities-controlled regime to sustain high yields, Nigeria risks attracting unstable capital inflows that will exit rapidly, putting pressure on the naira.

Beyond monetary and credit risks, there is a troubling regulatory dimension. The CBN’s move to migrate fixed-income trading and settlement from the FMDQ Securities Exchange, which is under SEC oversight to its own Real-Time Gross Settlement (RTGS) and S4 platforms has ignited a full-blown turf war between the CBN and the Securities and Exchange Commission.

Under the Investments and Securities Act (ISA) 2025, the SEC holds exclusive authority over trading venues. Critics warn that the CBN’s attempt to operate exchange-like infrastructure violates statutory boundaries and risks destabilizing the market.

Dr. Akin Olaniyan, CEO of Charterhouse Limited, described the move as “a potential recipe for dual regulation and confusion,” arguing that it may undermine investor confidence. Similarly, Dr. Walker Ogogo, pioneer Registrar of the Institute of Capital Market Registrars, noted that since the CBN already owns 16 percent of FMDQ, operating parallel infrastructure creates conflicts of interest that send negative signals to foreign investors.

MoneyCentral reports that the migration could trigger a 67 percent drop in FMDQ’s trading volume, weakening a system that has long supported Nigeria’s fixed-income ecosystem.

Veteran banker Victor Ogiemwonyi stated, “the CBN is not an exchange; it should not be involved in issuing, dealing, and settling securities. Conflating these roles creates unnecessary risk.” His concerns are grounded in the principle that market operators must be independent from regulators to prevent conflicts of interest. The CBN’s dual role as both regulator and operator blurs these lines and may set a dangerous precedent.

The real casualties of these structural conflicts will be SMEs and the broader private sector. These enterprises rely on bank credit to fund inventory, acquire machinery, expand operations, and withstand economic shocks. When banks prefer government securities over lending,

–       SMEs face higher rates,

–       stricter collateral requirements,

–       fewer loan products, and shorter tenors.

–       Many will be forced to downsize, lay off workers, or close altogether.

In an economy where SMEs account for over 90% of jobs, this contraction would be disastrous.

Another major overarching risk is that:

–       The CBN’s consolidation of securities issuance power without corresponding checks from the DMO and Ministry of Finance creates an unbalanced financial architecture where monetary priorities overshadow fiscal realities and private-sector growth.

–       Policies crafted in silos rarely produce macroeconomic stability. They produce distortions, uncertainty, and systemic fragility.

Nigeria stands at a critical junction. Securities issuance can be made transparent without centralizing all power in the CBN. Fixed-income markets can be cleaned up without dismantling the institutional balance that preserves confidence. What the country needs is coordination, not consolidation; collaboration, not domination.

If the CBN continues its takeover without robust guardrails, the result may be a financial system where banks stop lending, SMEs continue to collapse, interest rates remain high, the naira stays volatile, and regulatory conflicts scare away both local and foreign investors.

To avoid the dangerous risks ahead, Nigeria must:

1.     Strengthen collaboration between CBN, DMO, and Ministry of Finance. Debt issuance must reflect both monetary and fiscal realities not just liquidity needs.

2.     Prioritize long-term bonds over short-term T-Bills. This reduces rollover risk and provides stable funding at lower long-term cost.

3.     Implement SME-focused credit interventions through private banks, not direct CBN lending. Monetary policy should not attempt to replace commercial banking.

4.     Reduce government’s domestic borrowing needs. This requires fiscal reforms, spending discipline, and revenue expansion not more debt.

5.     Protect private-sector credit allocation. Regulators should discourage excessive bank investment in government securities.

Without these safeguards, the economy risks tilting dangerously toward monetary domination and private-sector suffocation.

The gains of transparency cannot come at the cost of institutional imbalance. Nigeria’s economic recovery depends on a thriving private sector, not an expanding government debt market. The central bank must not become the single most powerful issuer, dealer, regulator, and judge in its own market. That path leads not to stability but to systemic risk, risk that Nigeria’s fragile economy can ill afford.

Meanwhile, it is important for CBN to provide clarity on the economic rationale behind this centralisation of power. The CBN must come forward to justify how this shift will tangibly benefit the economy, particularly in the areas most sensitive to credit availability, financial stability and stability for Nigeria’s broader economy.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]


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Court Deals Fresh Blow to NBC, Throws Out Appeal over Broadcast Fines

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The Court of Appeal in Abuja has dismissed an appeal filed by the National Broadcasting Commission (NBC) challenging a Federal High Court judgment that restrained the commission from imposing fines on broadcast stations.

Court Deals Fresh Blow to NBC, Throws Out Appeal Over Broadcast Fines

Delivering judgment, Justice Jane Esienanwan Inyang held that the appeal was fundamentally defective and therefore incompetent.

The appeal stemmed from a Jan. 17, 2024 judgment delivered by Justice Rita Ofili-Ajumogobia of the Federal High Court, Abuja, which barred the NBC from enforcing N5 million fines imposed on several broadcast stations in 2022.

The sanctions had been issued over allegations that the stations aired documentaries on banditry and insecurity considered by the commission to be capable of undermining national security.

The affected broadcasters included Multichoice Nigeria Limited, owners of DStv, TelCom Satellite Limited, Trust TV Network Limited and NTA StarTimes Limited.

The suit was instituted by Media Rights Agenda (MRA), which challenged the legality of the fines imposed by the commission.

In her ruling, Justice Inyang pointed to a discrepancy in the appeal documents, noting that the respondent before the Federal High Court was listed as the “National Broadcasting Commission,” while the notice of appeal identified the appellant as the “Nigerian Broadcasting Commission.”

According to the court, the inconsistency was substantial enough to deprive it of the jurisdiction required to entertain the appeal.

“The notice of appeal is the foundation of an appeal and a condition precedent to the exercise of appellate jurisdiction by this court,” the judge held.

Consequently, the appeal was struck out without consideration of the substantive issues raised by the commission.

The ruling represents another setback for the NBC in its efforts to defend its authority to sanction broadcast organisations through administrative fines.

In April 2026, the Court of Appeal similarly dismissed a separate appeal by the commission against another judgment that restricted its powers to impose fines on broadcasters.

Earlier, in May 2023, the Federal High Court in Abuja ruled that the NBC lacked the judicial authority to impose penalties on media organisations without recourse to the courts.

The controversy over the commission’s sanctioning powers dates back to March 2019 when the NBC imposed N500,000 fines on 45 broadcast stations for alleged violations of the Nigerian Broadcasting Code during the general elections.

At the time, the then Director-General of the commission, Is’haq Kawu, said the sanctions were imposed for ethical breaches and violations of broadcasting regulations.

Legal analysts say the latest judgment reinforces previous court decisions limiting the commission’s authority to impose fines on broadcasters without judicial intervention.


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Nigeria Launches FreeTV Nationwide

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Nigeria has launched FreeTV, a broadcasting platform, designed to provide households across the country with free access to digital broadcasting, improved picture quality, and a wide range of local and international content without subscription fees.

Nigeria Launches FreeTV Nationwide

The announcement was made in a post on the official X handle of the Presidency, describing the initiative as part of President Bola Ahmed Tinubu’s Renewed Hope Agenda, which prioritises inclusion, expanded access to opportunities, job creation, support for local enterprise and the use of technology to improve daily life for citizens.

According to the statement, FreeTV forms part of Nigeria’s Digital Switch-Over (DSO) programme and is intended to ensure that no Nigerian is excluded as the country transitions fully from analogue to digital broadcasting.

The platform will offer access to more than 100 national, regional and state-owned channels, covering news, sports, films, music, children’s programming, educational content, as well as dedicated Yoruba, Hausa and Igbo language channels.

The Presidency noted that the service will be accessible through satellite, terrestrial transmission and a dedicated FreeTV mobile application, enabling coverage for users in urban centres, rural communities and previously underserved areas that were not fully captured in earlier DSO pilot phases.

It also clarified that Nigerians will not need to purchase new television sets to access the service. Existing televisions can work with compatible DVB-T2 or DVB-S2 decoders, while users with already compatible free-to-air devices may not require additional equipment.

Speaking ahead of the launch, Charles Ebuebu, director-general, National Broadcasting Commission (NBC), said the initiative reflects the administration’s broader digital inclusion strategy.

“FreeTV speaks directly to President Bola Ahmed Tinubu’s vision of Renewed Hope towards expanding access, creating opportunity and ensuring that every Nigerian, regardless of location or income, can benefit from the digital economy. With FreeTV, families across Nigeria can enjoy quality digital television without a monthly subscription, while our local content producers, technicians and young creatives gain new platforms and new jobs,” he said.

The statement added that the platform will also strengthen Nigeria’s creative and broadcast industry through regional production hubs in Lagos, Abuja, Port Harcourt, Enugu, Kano and Benin, creating employment opportunities for content creators, editors, camera operators, sound engineers and other media professionals.

The Presidency further disclosed that the final analogue switch-off remains scheduled for December 31, 2028, urging Nigerians to begin preparations by confirming decoder compatibility and downloading the FreeTV mobile application ahead of rollout.

 

 


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Stakeholders Endorse Hybrid Model for Nigeria’s Digital Switch

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Stakeholders in Nigeria’s broadcasting industry have endorsed a hybrid digital broadcasting model that combines Digital Terrestrial Television (DTT), Direct-to-Home (DTH) satellite services, and digital application-based platforms for the country’s Digital Switch Over (DSO) programme,

Stakeholders Endorse Hybrid Model for Nigeria’s Digital Switch

The resolution was reached at a high-level stakeholder meeting convened by the National Broadcasting Commission (NBC) under the supervision of the Federal Ministry of Information and National Orientation at NICON Luxury Hotel, Abuja.

The meeting, chaired by Alhaji Mohammed Idris, minister of Information and National Orientation, brought together regulators, broadcasters, signal distributors, set-top box manufacturers, content producers, satellite operators, and industry associations to chart a sustainable path for Nigeria’s long-delayed digital migration project.

Addressing stakeholders during the closed-door engagement session, the minister described the meeting as a collaborative effort aimed at finding practical solutions to challenges facing the DSO project.

“This engagement is a family discussion aimed at finding practical solutions to ensure the success of the Digital Switch Over project. Government has no hidden agenda, and all decisions will be guided by national interest, stakeholder inclusion, and the long-term sustainability of the broadcasting industry,” he said.

The minister acknowledged concerns raised by industry players regarding stakeholder consultation and participation in previous phases of the project, noting that while broader engagement should ideally have commenced earlier, there remained an opportunity to build consensus and move forward together.

“While there may be differing views on implementation approaches, there is broad agreement that Nigeria must complete its digital migration journey. We must work collectively to achieve this national objective,” he stated.

Mr Charles Ebuebu, director general, NBC, described the stakeholder meeting as “iconic”, noting that it marked a turning point in Nigeria’s efforts to complete the digital migration.

He said the country had spent over a decade on the DSO journey, missing several deadlines, but expressed optimism that a clear implementation plan was now being developed.

Ebuebu said the commission, in collaboration with stakeholders, is working toward a sustainable model that ensures return on investment for industry players while delivering value to the nation.

He said that the outcome of the consultation process would produce a unified framework for implementation and communication going forward.

Mrs Jane Nkechi Egerton-Idehen, managing director, Nigerian Communications Satellite (NIGCOMSAT), said the DSO initiative forms part of broader federal interventions aimed at building a sustainable broadcasting ecosystem.

She explained that government investments had supported satellite coverage, national call centres, and regional production studios across the country.

According to her, the objective is to address gaps in content distribution and ensure that Nigerian broadcasting reflects the country’s linguistic and cultural diversity.

“We are not departing from the original plan. We are innovating on how it is implemented,” she said.

She also highlighted efforts to expand access to production facilities across geopolitical zones to support content creators and reduce dependence on major urban centres.

The meeting attracted 128 participants, including the Director-General of the NBC; Permanent Secretary of the Federal Ministry of Information and National Orientation, Dr. BRM Ukire; Director-General of the Nigerian Television Authority (NTA), Abdulhamid Dambos; Director-General of the Advertising Regulatory Council of Nigeria (ARCON), Dr Olalekan Fadolapo; Chairman of the Broadcasting Organisations of Nigeria (BON), Chief Tony Akiotu; Managing Director of NIGCOMSAT Ltd, Mrs Jane Nkechi Egerton-Idehen; and representatives of licensed broadcasters and other industry stakeholders.

During deliberations, stakeholders agreed that the DSO project remains both necessary and desirable for Nigeria, emphasising that the transition should prioritise national interest, industry sustainability, local content development, local manufacturing, and job creation.

Among the key resolutions reached was the affirmation that Digital Terrestrial Television (DTT) remains a critical component of the DSO framework and should not be discontinued. Participants also agreed on the need to reconstitute the DigiTeam implementation platform to provide a structured mechanism for consultation, collaboration, and industry participation.

Stakeholders further called for stronger engagement between regulators and industry players, with an agreement that stakeholder meetings would be held at least quarterly to ensure continuous alignment on implementation strategies.

The meeting also welcomed ongoing efforts by the NBC and ARCON to develop a sustainable business model aimed at improving audience measurement systems, strengthening advertising revenue generation, and enhancing the long-term viability of broadcasting organisations.

In addition, stakeholders were assured by NIGCOMSAT of the reliability of satellite infrastructure supporting the DSO platform.

The company disclosed that backup arrangements with alternative satellite operators were already in place to guarantee uninterrupted service and eliminate the need for subscriber dish realignment.

As part of the agreed next steps, the Federal Government, through the Ministry of Information and National Orientation, will reconstitute the DigiTeam stakeholder platform, while the NBC will continue consultations with set-top box manufacturers and other industry stakeholders to address concerns relating to existing investments and future participation in the digital broadcasting ecosystem.

The stakeholders expressed confidence that the renewed collaborative approach would accelerate Nigeria’s digital migration, improve broadcasting services, expand audience reach, attract investment, create jobs, and deliver greater value to Nigerian consumers.

 


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