By Suara Sherif
Nigeria’s return to stronger demand in the international debt market is offering fresh indications of improving investor appetite for the country’s financial assets, as foreign buyers increase their exposure to its dollar-denominated government securities.
The renewed interest has pushed average yields on Nigeria’s sovereign Eurobonds down by four basis points to 7.03 per cent, reflecting stronger buying activity at a time when parts of Africa’s external debt market are experiencing selling pressure.
Market data attributed to Cowry Asset Limited indicate that investors have shown particular interest in short- and medium-term Nigerian bonds, suggesting that the country’s securities are attracting attention despite lingering concerns over inflation, borrowing costs and global economic uncertainty.
Among the strongest performers were the FGN Euro 3 and FGN Euro 7 bonds, whose yields each declined by 24 basis points to 5.96 per cent and 7.23 per cent respectively. The FGN Euro 5 also recorded a 21-basis-point reduction to 6.83 per cent, while the FGN Euro 10 yield fell by 19 basis points to 7.65 per cent.
Further along the maturity spectrum, the FGN Euro 20 recorded a 14-basis-point decline, bringing its yield to 8.34 per cent.
The latest performance extends a broader recovery in Nigeria’s external debt securities, following a 16-basis-point contraction in average benchmark yields the previous week. The March 2029 and February 2032 notes led that rally, with yields falling by 19 basis points each.
The improved appetite comes as investors reassess opportunities in emerging markets, with expectations of stronger oil-related revenues and continued economic reforms providing some support for Nigeria’s investment outlook. The United States Federal Reserve’s decision to pause interest rate increases has also contributed to expectations of sustained demand for emerging-market debt.
For Nigeria, the development is significant because stronger demand for sovereign Eurobonds can help improve the country’s position in international capital markets and potentially reduce the cost of raising dollar-denominated financing. However, falling yields alone do not establish that the country’s broader economic challenges have been resolved.
Analysts say the direction of international interest rates, movements in crude oil prices and domestic inflation will remain important determinants of foreign investors’ willingness to maintain their exposure to Nigerian securities.
An Abuja-based economist, Chukwunonso Iheoma, observed that the decline in yields indicated growing investor comfort with Nigeria’s sovereign risk profile and a willingness to increase exposure to its external debt.
He, however, cautioned that sustaining the renewed interest would require stronger foreign exchange earnings, effective management of debt-servicing obligations and lasting macroeconomic stability.
The challenge for the Federal Government, therefore, extends beyond attracting foreign capital into its debt instruments. Maintaining investor confidence will depend on the ability to translate reform commitments into measurable economic improvements, particularly in revenue generation, foreign exchange stability and inflation management.
While the latest market movement offers an encouraging signal for Nigeria’s external financing outlook, its durability will ultimately depend on whether the improving sentiment can be supported by stronger economic fundamentals rather than temporary shifts in global investment conditions.
