Driven by heightened risk-off sentiment among foreign portfolio investors, Nigeria’s sovereign Eurobond yields surged in the international market, amid broad-based sell-offs across African debt instruments.
Despite expectations of sustained economic growth in 2025—underpinned by ongoing reforms—investors rotated out of Nigerian debt positions, weighed down by concerns over declining government revenues. Recent data from the Central Bank of Nigeria revealed that federally collected revenue dropped by 31% in January, exacerbating investor caution. This coincides with ongoing volatility in oil prices and persistent pressure on crude output.
As investors sought safer assets, Nigeria’s Eurobond holdings came under pressure, with average yields nearing 12% before a modest rebound. On Tuesday, bearish sentiment resurfaced, triggering another wave of sell-offs across the curve—impacting short-, mid-, and long-term maturities alike.
The March 2029 Eurobond saw particularly intense selling pressure, pushing its yield up by 6 basis points to 10.64%. The move signals deepening pessimism among investors and reflects further downward pressure on bond prices.
Later in the trading session, the broader African Eurobond market experienced a modest recovery, buoyed by firmer oil prices, a slightly weaker US dollar, and renewed buying interest in Nigerian, Angolan, and select Egyptian debt.
Looking ahead, a market rally is anticipated on Wednesday, following the International Monetary Fund’s revised global growth forecast of 2.8%, while maintaining Nigeria’s GDP growth estimate at 3%.
Meanwhile, Nigeria’s local bond market remained resilient, with steady demand observed across the curve—particularly in the belly—where the February 2031 and February 2034 instruments attracted significant interest.
