Nigeria Eurobond Yields Hit 3-Year Low as Investor Confidence Surges on Economic Reforms

Nigeria’s Eurobond yields are nearing their lowest levels in three years, a development driven by strong investor confidence in the country’s sweeping economic reforms. These reforms — including exchange rate liberalisation, fuel subsidy removal, and tax overhauls — have positioned Nigeria as a leading reform-driven market among emerging economies. With yields falling to 8.17% from highs of over 11% in April, financial markets are responding positively to a new sense of stability and reform clarity under President Bola Tinubu’s administration.

Analysts and portfolio managers note that the Central Bank of Nigeria’s policy direction, especially in stabilising the naira and managing inflation, has been a major catalyst for renewed optimism. Expectations are now rising that yields could dip to the 7% region before year-end — a level last seen in April 2022. This reflects both improving domestic fundamentals and growing international demand for Nigerian debt securities amid global risk appetite.

Much of the investor sentiment is being fueled by the perceived sustainability of Tinubu’s reforms, which initially faced skepticism. However, steady macroeconomic signals — including a more predictable exchange rate, declining inflation from a 28-year high, and structural fiscal adjustments — have restored trust. Foreign portfolio inflows are increasing, suggesting that markets are betting long-term on Nigeria’s economic turnaround.

Despite some volatility during the week — notably from concerns about U.S. trade policy and Fed leadership legal issues — market sentiment improved toward the weekend. A U.S.–Japan trade deal and expectations of renewed U.S.–China talks helped support global markets, indirectly benefiting Nigerian Eurobonds. This was further supported by positive indicators such as strong U.S. consumer sentiment and retail data, which helped sustain bullish momentum in early trading sessions.

Experts like Gbolahan Ologunro from FBNQuest and Efe Ogunnaiya from Lagos-based firms suggest that continued global risk-on sentiment, coupled with prospects of a U.S. Federal Reserve rate cut, could drive Nigerian bond yields even lower. A lower yield environment signals rising bond prices, which is a gain for investors, strengthening Nigeria’s positioning as a reform-led investment destination in sub-Saharan Africa.