Yields on Nigeria’s Eurobonds have risen by 19 basis points to settle at 9.98% in the global capital markets, driven by renewed sell-offs across African sovereign debt instruments amid broader concerns over oil-dependent economies.
Market analysts have attributed the uptick in yields to mounting risk-off sentiment among offshore investors, fueled by easing expectations around further monetary tightening in Nigeria. The potential for the Nigerian government to hold back on interest rate hikes could reduce inflation-adjusted returns, prompting a shift in investor sentiment.
However, the negative momentum in sovereign debt markets extended beyond Nigeria, reflecting a general market reaction to the growing uncertainty surrounding oil-producing nations. The volatility in global crude oil prices has further complicated matters, especially for countries like Nigeria and Angola, which rely heavily on petroleum exports for foreign exchange earnings.
Crude oil markets have been shaky, with doubts over future demand growth compounded by geopolitical developments, including the United States’ policy outlook. Reports indicate the US administration under President Donald Trump supports maintaining oil prices within the $40 to $50 per barrel range, with expectations of integrating Iranian exports into the global supply chain.
According to a market update by Cowry Asset Management Limited, foreign portfolio investors (FPIs) have significantly reduced their exposure to Nigerian sovereign bonds, driving up yields across short-, mid-, and long-term maturities. The Nov-2025 and Sep-2028 Eurobonds experienced particularly pronounced impacts, leading the general trend in yield expansion.
As a result, the average yield on Nigerian Eurobonds rose by 0.16%, closing at 9.98%. The broader African Eurobond market also faced selling pressure, largely due to fears over increased oil supply and weakened prices following the potential revival of the US-Iran nuclear agreement.
Issuers with oil-based revenues, such as Nigeria and Angola, saw underperformance in bond prices, pushing average Nigerian sovereign bond yields toward the 10% mark. Nevertheless, AIICO Capital Limited noted that some late-session bargain buying in undervalued securities helped to temper the extent of the decline before the market closed.
