• African bond spreads hit lowest level since 2019, boosting access

• Investor appetite grows amid falling inflation, rising credit ratings

• Nigeria, Angola, DRC plan new Eurobonds as conditions improve
  

African countries looking to raise funds on global markets are benefiting from a friendlier environment, as the yield gap between African sovereign bonds and U.S. Treasuries has narrowed to its lowest point since 2019. The tighter spread, measured by the JPMorgan Africa NexGem Index, signals renewed investor confidence in African sovereign issuers, long seen as high-risk.

Data from the Cbonds Africa Sovereign USD T-Spread Index show the yield differential fell to around 388 basis points in early October 2025, down sharply from nearly 900 bps in 2023. That’s the lowest level since before the pandemic, meaning investors are now demanding far smaller risk premiums to lend to African governments. According to Bloomberg, by July 2025, no African country’s sovereign bonds carried a four-digit spread, the first time since 2015.

Looser Conditions Boost Market Access

The narrowing reflects a more favorable financing climate for African borrowers after years of steep borrowing costs and investor skepticism fueled by the pandemic, high inflation, and global monetary tightening. The shift is being driven by falling inflation, stabilizing currencies, and the start of a global rate-cutting cycle that has revived investor appetite for emerging-market debt.

Improving credit ratings are amplifying this rebound. In 2025, Fitch Ratings and Moody’s both upgraded Nigeria, S&P Global lifted Ghana out of default, and South Africa earned a positive outlook. According to Fitch, the number of rating upgrades across emerging markets now exceeds downgrades, a first since 2018.

Several African countries are taking advantage of the renewed appetite. After Nigeria, which plans to issue up to $2.3 billion in new debt, Angola is preparing a $1.5 billion Eurobond, its first since 2022, at some of its most favorable borrowing terms in six years. The Democratic Republic of Congo (DRC) is also planning its first-ever Eurobond, expected in 2026.

Even so, analysts remain cautious, warning that volatile commodity prices and a potential shift in global monetary policy could quickly derail the rally.

Fiacre E. Kakpo