Nigeria’s Eurobond Yields Ease On Rising Investor Confidence

Nigeria’s Eurobonds continued to trade steadily in the international debt market, with several sovereign dollar-denominated bonds priced above par and yields remaining below their original issuance levels, reflecting growing investor confidence in the country’s improving macroeconomic outlook.

Latest data released by the Debt Management Office (DMO) showed the 2027 Eurobond closed at 100.913 cents on the dollar, offering a yield of 5.813 per cent, below its issue yield of 6.500 per cent. Likewise, the 2028 Eurobond settled at 100.613 cents, with a yield of 6.041 per cent, compared with its issue yield of 6.125 per cent.

The 2029 Eurobond traded at 105.415 cents, yielding 6.187 per cent, while the 2030 bond closed at 101.954 cents with a yield of 6.529 per cent. Both securities continued to outperform their original pricing, indicating sustained demand for Nigerian sovereign debt.

Nigeria’s 2031 Eurobonds also maintained strong momentum. The January 2031 bond traded at 107.352 cents with a yield of 6.842 per cent, while the June 2031 issue closed at 111.435 cents, yielding 6.857 per cent. Longer-dated securities remained resilient, with the 2032 Eurobond priced at 104.352 cents, the 2033 bond at 101.152 cents, and the 2034 Eurobond emerging as one of the strongest performers, closing at 119.144 cents on the dollar with a yield of 7.297 per cent, substantially below its issue yield of 10.375 per cent.

Further along the curve, the 2036, 2038, 2046, 2047, 2049 and 2051 Eurobonds recorded yields ranging between 7.368 per cent and 8.031 per cent, suggesting investors remain comfortable holding Nigeria’s longer-term external debt despite global financial market uncertainties.

The improved pricing comes against a backdrop of strengthening macroeconomic indicators that have reshaped investor sentiment toward Nigeria over the past year. Following major economic reforms, including the removal of petrol subsidies and the liberalisation of the foreign exchange market, analysts have pointed to stronger fiscal revenues, improved foreign exchange liquidity and a more stable macroeconomic environment.

Nigeria’s economy is projected to expand by between 4.1 per cent and 4.3 per cent in 2026, with some forecasts as high as 4.6 to 4.7 per cent, after recording approximately 4.0 per cent growth in 2025. The economy grew 3.89 per cent in the first quarter of 2026, supported by continued resilience in the services sector, agriculture and a gradual recovery in oil production.

Inflation, which climbed above 33 per cent following the initial wave of economic reforms, has moderated significantly. Having eased to about 14.5 to 15 per cent by the end of 2025, headline inflation is expected to remain within the 12 to 16 per cent range in 2026, reinforcing expectations of improving macroeconomic stability.

Nigeria’s external position has also strengthened considerably. Foreign exchange reserves stood at approximately $45.5 billion in 2025 and are projected to rise toward $51 billion, while the country continues to post a healthy current account surplus estimated at between 4.8 per cent and 6.0 per cent of GDP. The naira has also experienced reduced volatility following an appreciation of nearly 5.9 per cent in 2025.

Fiscal indicators have likewise shown gradual improvement. The fiscal deficit is projected to remain between 2.3 per cent and 3.0 per cent of GDP in 2026, while government revenue continues to improve. Nigeria’s public debt, estimated at about ₦152 trillion to ₦159 trillion as of late 2025, remains manageable relative to GDP, although debt servicing continues to consume a significant share of government revenue.

The stronger macroeconomic backdrop has translated into improved performance across Nigeria’s Eurobond curve. Many of the country’s bonds are now trading above face value, with average yields declining from the elevated levels seen during the period of heightened uncertainty. The lower yields indicate investors now demand smaller risk premiums to hold Nigerian sovereign debt.

Market analysts note that international investors are increasingly rewarding Nigeria’s commitment to economic reforms, improved fiscal discipline and stronger external buffers. Higher oil production, resilient non-oil sector growth and improved foreign exchange liquidity have also contributed to renewed confidence in the country’s credit outlook.

However, analysts caution that challenges remain. High debt servicing costs, persistent food inflation, insecurity affecting agricultural output, volatility in global commodity prices and the potential for increased government spending ahead of the 2027 elections could weigh on investor sentiment if reforms lose momentum.