Nigeria’s Eurobond market experienced a dip in investor confidence this week as yields climbed by 10 basis points to 8.27 per cent, signalling renewed caution among investors ahead of the country’s $1.1 billion Eurobond repayment scheduled for November 2025.
The upward movement in yields reflects a growing sense of uncertainty over Nigeria’s debt management capacity, despite recent improvements in key macroeconomic indicators. Analysts say the rise in yields indicates that investors are demanding higher returns to compensate for perceived risks in the country’s foreign borrowing outlook.
Fixed-income analysts tracking Nigeria’s international debt market noted that U.S. dollar-denominated Nigerian sovereign bonds have maintained a steady upward trend. This, they said, is partly driven by global economic headwinds, cautious sentiment in emerging markets, and a shift toward safer investment assets.
According to traders at FMDQ Exchange, investor attention has been focused on Nigeria’s ability to meet its upcoming Eurobond obligations amid fluctuating oil prices and persistent fiscal pressure. Although Nigeria’s foreign reserves have improved slightly due to higher remittances and modest crude oil inflows, concerns remain about the country’s revenue diversification and debt service burden.
Despite the recent market pressure, several analysts remain optimistic that Nigeria’s borrowing costs could decline before the end of the year. They cite recent policy reforms, improved foreign exchange stability, and potential credit rating upgrades as positive indicators that may restore investor confidence. The Federal Government is also expected to raise an additional $2.3 billion through Eurobond issuance in the fourth quarter of 2025 to support infrastructure financing and budgetary needs.
Across Africa, Eurobond trading has largely been negative in recent weeks. Investors have continued to favour safe-haven assets such as gold and U.S. Treasury bonds as they await an anticipated interest rate cut by the U.S. Federal Reserve. The prolonged U.S. government shutdown, combined with weakening oil prices, has also contributed to a cautious stance among investors toward frontier and emerging markets.
Last week, African dollar bonds traded lower amid softer crude oil prices. Nigeria’s mid-curve Eurobonds — including the March 2029 and February 2030 maturities — saw yields rise by 44 basis points and 22 basis points, to 7.70 per cent and 7.71 per cent respectively. Analysts said these moves reflected short-term market repositioning ahead of the repayment cycle.
However, shorter-term bonds showed a mild recovery. The November 2025 note yield declined by 26 basis points to 6.73 per cent, suggesting that investors preferred short-duration instruments to hedge against global rate volatility. Market participants say short-term bonds are becoming more attractive due to lower exposure to long-term uncertainty and easier liquidity management.
At the longer end of the yield curve, Nigerian Eurobonds maturing between 2049 and 2051 remained largely stable. This indicates that investors are still pricing in Nigeria’s long-term fiscal potential, oil revenue prospects, and continued engagement with multilateral lenders such as the World Bank and the International Monetary Fund (IMF).
Meanwhile, the global investment climate remains tense. Renewed trade frictions between the United States and China, weaker oil demand forecasts, and rising geopolitical risks have created a wave of uncertainty across financial markets. Gold prices have surged above $4,000 per ounce, signalling a global shift toward risk-off sentiment as investors seek safety amid mounting volatility.
Market experts believe bearish sentiment may persist in the short term as traders continue to monitor developments in global trade, energy prices, and monetary policy. For Nigeria, attention remains fixed on the upcoming Eurobond repayment and how the Debt Management Office (DMO) plans to manage refinancing and rollover risks.
Analysts say timely repayment of the $1.1 billion Eurobond will be crucial in preserving Nigeria’s credit reputation and maintaining investor confidence in its external debt instruments. However, they warn that without stronger fiscal discipline, revenue expansion, and export diversification, Nigeria may continue to face higher borrowing costs in international capital markets.
As the repayment deadline approaches, investors and policymakers alike are keeping a close eye on Nigeria’s macroeconomic stability, hoping that the country’s reform momentum and improved policy coordination will sustain confidence in its Eurobond market.
