Disinflation Fuels Rally as Nigerian Eurobond Yields Drop to 9%

Investor appetite for Nigerian sovereign Eurobonds surged this week as inflation figures cooled in May, pushing average yields down to 9.00% and easing the federal government's international borrowing costs.

- 

The decline in yields—from a high of over 11% in Q2 2025—marks a significant shift in sentiment among global investors betting on Nigeria's economic stability.

According to analysts at Cowry Asset Management Limited, strong bargain hunting across key maturities—especially the NOV-25, NOV-27, and SEP-28 bonds—drove the average yield lower by 25 basis points. “This sharp reversal is largely driven by renewed confidence following Nigeria's disinflationary trend,” the firm said in an investor note.

Data from the National Bureau of Statistics (NBS) showed headline inflation eased to 22.97% in May, down from 23.71% in April. The softer inflation print was underpinned by slower growth in core inflation, which fell by 111 basis points to 22.28%, and a modest appreciation of the naira by 1.4% during the same period.

The rally in Nigerian Eurobonds mirrors a broader recovery in African debt markets. Investor risk sentiment improved markedly following de-escalation in the Israel-Iran conflict and fading fears of widespread Middle East disruptions.