Yields on Nigeria’s sovereign Eurobonds edged lower this week, driven by increasing foreign investor interest amidst improving macroeconomic fundamentals. The bullish sentiment follows a string of positive indicators, including a declining inflation trend, a 3.13% GDP growth rate in Q1 2025, and Nigeria’s continued high interest rate stance.
President Bola Tinubu’s administration has secured legislative backing to raise $21 billion in foreign loans, a development that complements efforts to tighten domestic bond supply. Consequently, the demand for foreign-denominated debt has strengthened, particularly among offshore portfolio investors.
Foreign investment sentiment has also been buoyed by global ratings agencies’ upgrades of Nigeria’s credit profile, citing the administration’s reform-focused economic strategy. These endorsements have contributed to increased dollar inflows and stabilized investor outlook on Nigeria’s sovereign debt.
On Tuesday, the Eurobond market saw robust activity, particularly in the FEB-2032 issuance, which contributed significantly to a 3 basis point decline in average yield to 8.50%, according to Cowry Asset Management.
Across African debt markets, investor sentiment remained largely upbeat. A notable geopolitical factor was U.S. President Donald Trump’s sharp remarks about the Federal Reserve chair, coupled with signals that his term may be winding down. The uncertain U.S. policy outlook appears to be fueling mild risk-on behavior in emerging market Eurobonds.
Nigerian Eurobonds saw mixed price actions, with a subtle buying tilt indicating cautious optimism. AIICO Capital Limited noted that the Fed’s neutral monetary stance and the lack of aggressive tightening signals have helped support the positive outlook on Nigeria’s foreign debt instruments.
