Nigeria’s Eurobond market has been hit hard by the global financial turbulence sparked by U.S. President Donald Trump’s announcement of a 10% import tariff on foreign goods. This move, along with retaliatory measures against countries with alleged “unfair trade practices,” has led to a surge in risk aversion among investors worldwide. As a result, Nigerian Eurobonds have experienced massive selloffs, with average yields soaring to 11.21% by April 9, 2025, a sharp increase of 163 basis points from March. This is the highest yield seen since the early days of the Covid-19 pandemic in 2020.
The selloff has been most pronounced on the short end of the curve, with the November 2025 bond rising by 282 basis points. The longer-term bonds, such as the September 2051 Eurobond, also saw yield increases, climbing by 97 basis points to hit 11.65%. This dramatic shift reflects the growing concerns surrounding the global trade war and its ripple effects on global markets, including the oil sector. The ongoing trade tensions have pushed Brent crude prices down to $63.7 per barrel, further squeezing Nigeria’s foreign exchange earnings.
Additionally, the Nigerian naira has depreciated by about 4.8% in April, closing at N1,625 to the U.S. dollar. This currency weakness, combined with falling oil prices and reduced domestic oil production, is exacerbating concerns about Nigeria’s financial stability. Despite interventions by the Central Bank, investor sentiment remains fragile, contributing to continued selloffs in Nigeria’s Eurobonds as markets brace for further economic uncertainty.
However, there is cautious optimism among some analysts, including Victor Onyema, Head of Investment Management at Norrenberger Asset Management. Onyema acknowledges the sharp rise in Eurobond yields but suggests that the market may stabilize in the near future as investors adjust to the implications of the global trade situation. As the U.S.-China trade tensions continue to evolve, the global financial landscape remains volatile, and investors are likely to stay defensive until clearer signals emerge about the future direction of interest rates and global economic conditions.