Nigeria’s sovereign Eurobonds surged last week, buoyed by renewed foreign investor confidence and strengthening local macroeconomic indicators. The price rally led to a dip in yields, signalling lower borrowing costs for the Nigerian government and other African issuers.
According to financial services firm Cowry Asset Limited, the average yield on Nigerian Eurobonds fell by six basis points to settle at 8.39% by the close of trading. The movement reflects heightened demand, particularly across the short and belly sections of the curve,portions of the bond maturity spectrum favoured by cautious investors.
Market analysts attributed the surge to strong investor appetite for U.S. dollar-denominated Nigerian debt, despite volatility in U.S. Treasury yields. Traders noted that while foreign investors have largely priced in Nigeria’s ongoing disinflation trend, sentiment remains mixed regarding long-term positioning in African debt markets.
“Investors are showing a preference for short-duration instruments,” said one bond trader, pointing to increased activity in Nigerian Eurobonds maturing in November 2025.
The bullish tone in Nigeria’s Eurobond market mirrors broader trends across African sovereign debt. The continent’s Eurobond segment posted positive returns during the week, driven by easing global trade tensions. Recent trade agreements between the U.S. and Japan, and separately between the U.S. and the EU, have helped boost sentiment by reducing tariff risks.
Alongside Nigeria, Eurobonds issued by Angola and Egypt also saw increased interest. Ghana, however, experienced yield curve pressure due to sell-offs, highlighting diverging investor sentiment across the region.
Overall, African Eurobond yields compressed by 22 basis points on average over the week, as steady buying activity persisted despite bouts of profit-taking. Investors are now closely watching the upcoming August 1 deadline for potential U.S. tariff changes, which could further shape global market direction.
