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Nigeria’s foreign exchange (FX) reforms and the relative stability of the naira have been credited with bolstering investor confidence and supporting the Federal Government’s successful issuance of a $2.25 billion Eurobond last week.

The landmark transaction underscores the impact of the Central Bank of Nigeria’s (CBN) ongoing financial sector reforms, which have restored confidence in the Nigerian economy and rekindled foreign investor appetite for Nigerian assets.

Investors across major global markets, including Europe, North America, Asia, and the Middle East, swooped on Nigeria’s latest Eurobond, which was oversubscribed, reflecting robust demand and renewed faith in the country’s economic management.

The 10-year and 20-year tranches were priced at 8.625 percent and 9.125 percent respectively, tighter than initial guidance, with total orders exceeding $13 billion, according to the Debt Management Office (DMO). The 10-year, $1.25 billion bond maturing in 2036 carried a coupon of 8.6308 percent, while the 20-year, $1.10 billion note due in 2046 was priced at 9.1297 percent.

The issuance marks Nigeria’s largest-ever orderbook and a major return to international capital markets, reflecting investors’ renewed trust in the country’s fiscal and monetary policy direction. The DMO disclosed that Nigerian investors also participated in the offer, signaling strong domestic endorsement of the government’s reform efforts.

“Nigeria appears to be back in business as long-awaited economic reforms take shape,” said Emre Akcakmak, Portfolio Manager, East Capital. He noted that measures such as improved currency liquidity, investor profit repatriation flexibility, and the stability of the naira have boosted confidence. “We feel the Central Bank of Nigeria will continue to stem any sharp appreciation of the naira to limit profit-taking from the fast money community,” he added.

Samir Gadio, head of Africa Strategy at Standard Chartered Plc, also told Bloomberg that portfolio inflows have likely been supported by improved investor confidence amid key structural reforms, better FX market functioning, and moderating naira volatility. “Besides, Nigeria’s local market is seen as less correlated with global risk conditions than more liquid emerging market peers,” he said.

How the Reforms Set the Stage

Under Olayemi Cardoso, governor of the CBN, a series of bold reforms have been implemented to attract foreign capital, stabilise prices, and strengthen the exchange rate. The new administration in 2023 liberalised the FX market, halted CBN financing of fiscal deficits, and ended fuel subsidies, measures that have been complemented by improved revenue collection and inflation control strategies.

These efforts have already yielded results. International reserves have risen, access to FX in the official market has improved, and Nigeria’s sovereign risk premium has fallen to its lowest level since January 2020. The unification of exchange rates and clearance of over $7 billion in FX backlogs have also been hailed by global institutions, including the World Bank, as bold steps toward long-term sustainability.

Additionally, Nigeria’s return to international capital markets last December and recent upgrades by credit rating agencies have strengthened the country’s investment profile. The operationalisation of a major domestic refinery under a deregulated framework further enhances Nigeria’s value chain and macroeconomic outlook.

At the 2025 Monetary Policy Forum themed “Managing the Disinflation Process,” Cardoso reaffirmed the CBN’s focus on sustaining price stability, advancing toward an inflation-targeting regime, and maintaining a disciplined monetary policy stance. “Managing disinflation amidst persistent shocks requires robust policies and coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence,” Cardoso said.

The CBN’s reforms extend beyond FX management to the banking sector, where new minimum capital requirements (effective March 2026) are designed to strengthen financial institutions and prepare the economy for its $1 trillion GDP target. Cardoso emphasised that as the Bank shifts from unorthodox to orthodox policy approaches, its priority remains to restore confidence and credibility while keeping inflation under control.

Market Reactions After the Eurobond

Following the Eurobond issuance, the naira appreciated marginally as Nigeria’s external reserves climbed to a seven-year high of $46.07 billion, the highest level since August 2018. CBN data showed that the naira closed at N1,436.74 per dollar, gaining N1.75 or 0.12 percent compared to N1,438.49 at the Nigerian Foreign Exchange Market (NFEM), last week.

In an emailed note to investors, Ifeanyi Uba, head of Investment Research at Comercio Partners Limited, said that appetite for Nigerian debt has been buoyed by ongoing reforms such as fuel subsidy removal and naira devaluation. “These measures, though economically painful, have improved fiscal transparency and market confidence,” Uba said.

He added that Nigeria’s return to the international debt market highlights renewed investor demand for higher-yielding frontier market assets. “With emerging market governments issuing nearly $240 billion in debt so far this year, surpassing pandemic-era levels, Nigeria’s re-entry underscores both the renewed investor hunt for yield and improved global sentiment toward African economies,” he noted.

Analysts at Comercio Partners further described the Eurobond issuance as a strong reaffirmation of investor trust despite geopolitical tensions. They observed that the inflows will boost reserves, provide fiscal breathing room, and enhance Nigeria’s capacity to meet short-term obligations. However, they cautioned that the move also raises exposure to FX risk and hard-currency interest costs.

Adebowale Funmi, head of Research at Parthian Securities, said the Eurobond’s oversubscription by more than 400 percent reflects strong global confidence in Nigeria’s economic outlook. “This renewed optimism is largely driven by ongoing reforms and Nigeria’s recent removal from the Financial Action Task Force (FATF) grey list, which have both enhanced credibility and market perception,” Funmi said.

Understanding the Eurobond Issuance

According to the DMO, proceeds from the $2.25 billion Eurobond will be used to finance Nigeria’s 2025 fiscal deficit and other key government funding requirements. The bonds will be listed on the London Stock Exchange, FMDQ Securities Exchange Limited, and the Nigerian Exchange Limited, enhancing liquidity and visibility to global investors.

President Bola Ahmed Tinubu described the strong subscription as a demonstration of global confidence in Nigeria’s reform trajectory. “We are delighted by the strong investor confidence demonstrated in our country and our reform agenda. This development reaffirms Nigeria’s position as a recognised and credible participant in the global capital market,” he said.

Wale Edun, minister of Finance and Coordinating Minister of the Economy, hailed the success as proof of the international community’s trust in Nigeria’s macroeconomic direction. “This successful market access demonstrates the global community’s continued confidence in Nigeria’s reform trajectory and our commitment to sustainable, inclusive growth,” Edun stated.

Patience Oniha, director general of the DMO, said the diverse participation of fund managers, insurance and pension funds, hedge funds, and banks across multiple jurisdictions highlights Nigeria’s strong and expanding investor base. “Nigeria’s ability to access the Eurobond market to raise long-term funding needed to support the growth agenda of President Tinubu is a major achievement and aligns with the DMO’s objectives of diversifying funding sources,” Oniha said.

Market analysts agree that the success of the Eurobond issuance signals renewed investor faith in Nigeria’s fiscal and monetary leadership. As one market participant put it, “It means one thing, confidence in the Nigerian government. The strong subscription to the Eurobond shows that confidence is returning. This is just the beginning, and it demonstrates that things are improving. GDP is growing, the exchange rate is stable, and interest rates are coming down. These indicators show that the economy is moving in the right direction.”

Joint book-runners for the Eurobond issuance were Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan, and Standard Chartered Bank, with FSDH Merchant Bank Limited serving as financial adviser.

The combination of disciplined monetary management, bold FX reforms, and renewed fiscal credibility has positioned Nigeria once again as a strong contender in the global capital market, a development that underscores how policy consistency and reform momentum can unlock international confidence and sustainable capital inflows.