Nigeria’s Eurobond market witnessed a sharp decline in average yields, dropping by 31 basis points to 8.6%, driven by increased investor demand and favorable macroeconomic signals. This latest development signals renewed interest from foreign investors seeking high-yield assets in emerging markets.
The positive sentiment surrounding Nigeria’s economic reforms has enhanced the attractiveness of its foreign currency-denominated bonds, particularly as yields continue to outpace comparable instruments in more developed economies.
Amid shifting global dynamics, U.S. Treasury yields declined last week, with the 30-year note falling to 4.846% and the 10-year to 4.283%. Meanwhile, geopolitical tensions and renewed trade disputes, including the suspension of U.S.-Canada trade talks and China negotiations, sparked a brief rally in U.S. Treasuries.
However, a surge in African Eurobond activity followed a reduction in global tensions. President Trump’s support of Israeli strikes on Iran initially triggered concerns over oil supply routes, pushing oil prices higher. But with Iran’s muted response and signals of a ceasefire, markets rebounded, and investor interest returned midweek.
Nigerian and Egyptian bonds led gains during the rally, while Angola’s debt underperformed due to volatility in oil prices and ongoing fiscal concerns. Analysts said the broad decline in Nigeria’s Eurobond yields reflected strong demand across all maturities, both short- and long-dated instruments.
Investor sentiment was further boosted by Nigeria’s improved external balance, successful capital repatriation, and its removal from the IMF’s debt monitoring list. As a result, Nigeria continues to stand out in Africa’s sovereign debt market.
The average Eurobond yield for Nigeria fell by 0.36% over the week to 8.61%, with strong appetite likely to persist despite the release of hotter-than-expected U.S. inflation data. Federal Reserve Chair Jerome Powell warned that persistent inflation may delay anticipated rate cuts, yet global funds continue to rotate into high-yield frontier assets like Nigeria’s.
