Sovereign bonds from African nations experienced an upswing as international investors realigned their holdings in response to evolving worldwide interest rate patterns, incorporating changes in petroleum costs.
The United States adjusted its federal funds rate downward by 25 basis points on three occasions, while the European Central Bank (ECB) has held steady on its rates, and the Bank of England has adopted a more lenient approach unexpectedly.
Economic landscapes across Africa are evolving rapidly through various reforms, with Ghana at the forefront by reducing rates by 1,000 basis points over the year. Nigeria maintains a stricter policy with rates at 27% against an inflation figure of 14.45%.
Egypt’s economic situation is under strain but shows promise thanks to substantial funding from Qatar and backing from international financial institutions, set to propel forward progress.
Issuers tied to oil, such as Nigeria and Angola, attracted considerable purchase activity, alongside reasonable interest in Egypt, Ghana, and other prominent African issuers offering higher returns to offset associated risks.
Fueled by value-seeking trades, Nigeria’s sovereign bonds bounced back, showing an average yield reduction of -4 basis points from the prior week, settling at 7.10% versus the previous 7.14%.
In particular, the bonds maturing on 16-FEB-2032 (-12 bps), 28-SEP-2033 (-12 bps), and 28-NOV-2027 (-14 bps) saw the most substantial yield decreases during this timeframe. Experts at Anchoria Securities Limited link this to revitalized trader confidence in light of ongoing changes and optimism for expansion.
The fluctuating yet affirmative trading in African sovereign bonds was shaped by alterations in international borrowing costs, shifts in oil values, and important economic indicators from the U.S., as communicated by AIICO Capital Limited to its clients.
The period kicked off positively, bolstered by gains in longer-term U.S. Treasuries, appealing entry points, and supportive market conditions that heightened appeal for lucrative assets in developing economies.
Around the middle of the week, the atmosphere turned somewhat negative as oil values declined, shorter-term U.S. yields rose, and ambiguity surrounding forthcoming U.S. figures prompted limited realizations of gains in specific bond terms.
AIICO informed clients that nevertheless, focused acquisition remained apparent, especially for Nigeria’s 2029 issuance, reflecting interest based on perceived worth.
After U.S. consumer price data came in lower than anticipated and employment figures held steady, worldwide rates stabilized, and enthusiasm for risk rebounded, sparking fresh acquisitions as the week wrapped up.
During its December 2025 gathering, the Bank of England (BoE) lowered its key lending rate by 25 basis points to 3.75%, reducing costs to levels not seen since 2022.
This move highlights the bank’s reaction to diminishing price pressures and indications of a slowing job market, confirming its shift toward leniency as the economy aligns more with set objectives.
Inflation in the UK dropped to 3.20% annually in November 2025, from 3.80% the month before, per statistics from the Office for National Statistics (ONS). This represents the lowest level since the middle of 2023 and demonstrates ongoing reduction in inflationary trends.
The European Central Bank (ECB) opted to maintain its rates, keeping the primary refinancing rate at 2.15% and indicating that although inflation is decreasing, officials are wary of rushing into reductions.
This position reassured markets that potential rate decreases might occur in 2026, fostering risk willingness without causing instability.
With consistent oil pricing, minimal trader commitments, and competitive pricing comparisons, the market concluded the week on a slight upward note, as the typical benchmark yield fell by 10 bps to 7.07%.
Experts foresee a guardedly optimistic environment in the coming week, aided by demand for bargains and possible relaxations in global rates, although trading volumes could be subdued because of the holidays.
“We anticipate a favorable outlook shortly, reinforced by projections of declining worldwide yields and continued trader interest in Nigerian assets,” remarked Anchoria Securities Limited.
