Africa’s Eurobond Comeback: Pricing, Appetite & Risk

The African Eurobond market is rebounding after a two‑year pause. We unpack pricing trends, investor appetite, and key risks for sovereign debt in Africa in 2026.

Africa’s Eurobond market reawakens

After nearly two silent years, the Africa Eurobond market is staging a comeback. Sovereign issuers from Morocco and Egypt to Nigeria, Ghana, and Kenya have returned to offshore capital markets, tapping fresh funds to refinance maturing debt, fund infrastructure, and stabilize foreign‑exchange buffers.

This resurgence is playing out against a backdrop of easing global interest rates, bilateral debt restructurings, and IMF‑backed reforms in several sub‑Saharan economies. For institutional investors, the revival raises compelling questions: Is the pricing attractive enough? Who is buying African debt? And what risks need to be front-loaded in portfolios?

Why Africa paused Eurobond issuance

Between 2022 and early 2024, many African sovereigns effectively shut the Eurobond tap. Several factors converged:

• Rising global rates: As the US Federal Reserve hiked policy rates from near‑zero to 5.25–5.5%, the cost of dollar‑denominated borrowing surged, making issuance economically unpalatable for many African treasuries.
• Widening spreads: Credit‑default‑swap (CDS) levels and sovereign spreads blew out, especially in stressed cases such as Ghana, Zambia, and Nigeria, signaling heightened default concern.
• Currency and fiscal stress: Local‑currency depreciation and widening fiscal deficits constrained access to external markets, forcing some governments to pursue domestic financing or bilateral restructurings.

The result was a near‑freeze in new sovereign Eurobond issuance from mid‑2022, with only a handful of stronger‑credit players, such as Morocco and Egypt, able to test the market successfully.

Africa’s Eurobond comeback: What’s driving it?

By late 2024 and into 2025, the Africa Eurobond market showed clear signs of life. Sovereign issuances climbed back toward pre‑crisis levels, with roughly $21.6 billion of new African Eurobond issues in 2024 alone, including $13.8 billion in sovereign paper, up sharply from the muted volumes of 2022–2023.

Three fundamental drivers explain the comeback:

• Monetary policy pivot in the US: The prospect of Federal Reserve rate cuts in late 2025 has pushed down global bond yields, lifting appetite for higher‑yield emerging‑market assets.
• Spread compression and improved credit stories: After a sharp correction, many African sovereigns now trade at lower spreads than two years ago. For example, Morocco’s 5‑year CDS is around 100 bps, down from wider levels in 2023, while Ghana and Côte d’Ivoire have seen multi‑hundred‑basis‑point tightening versus 2022–2023 peaks.
• IMF‑backed programs and restructurings: Ghana and Zambia completed restructuring processes, while countries such as Egypt and Nigeria have engaged with the IMF on macroeconomic stabilization, signaling a clearer path to sustainability.

In practice, this means that Africa’s Eurobond market today is not just about cheap dollars but about signalling macroeconomic credibility to global investors.

Pricing trends: Yields, spreads & cost of borrowing

From a pricing perspective, African Eurobond yields have declined materially versus 2023 highs, although they remain elevated compared with global peers.

• Kenya’s 10‑year Eurobond (maturing 2028) saw yields fall by about 200 basis points to around 8.3% by mid‑2025, down from approximately 10.4% a year earlier, reflecting improved investor confidence and reduced FX pressure.
• Côte d’Ivoire’s 10‑year 2033 Eurobond yielded about 7.7% at the end of June 2025, a modest easing from the prior year, while Benin’s 13‑year 2035 line traded near 7.1% with a 100‑basis‑point drop year‑on‑year.

Sovereign spreads have also compressed across the board: Morocco has tightened by 120–150 bps, Côte d’Ivoire by nearly 200 bps, and South Africa by 150–200 bps, implying that international investors now price African risk lower than they did in 2023.

Nonetheless, the cost of borrowing remains high by historical standards. One recent Africa‑wide study notes that average interest paid across all creditors rose to 5.1% in 2024, up from 2.7% in 2020, reflecting both harder global conditions and the legacy of higher‑coupon Eurobonds issued in earlier cycles.

Investor appetite: Who’s buying African debt?

Demand for African sovereign Eurobonds in 2024–2025 has been surprisingly robust, especially around inaugural or benchmark reopenings.

• Morocco’s $2 billion Eurobond in 2025 was significantly oversubscribed, drawing heavy participation from global asset‑management and pension‑fund accounts, underscoring its “safe‑play” status within emerging‑market Africa.
• Egypt and Côte d’Ivoire likewise attracted strong orders, with yields noticeably below those of peers of similar credit quality, signaling that well‑governed, IMF‑aligned programs can command premium positioning.

Primary‑market activity has also been lifted by:

• Rebalancing of global EM portfolios: As global investors rotate out of overheated equity markets, they have added duration via emerging‑market bonds, including African sovereigns.
• Index‑inclusion flows: The AGR Africa Bond Index added 10 new bond lines (about USD 10 billion) in 2025, generating passive inflows into newly eligible African credits.

From a buyer profile, the market is dominated by international fixed‑income funds, sovereign‑wealth funds, and a growing slice of high‑net‑worth private‑banking clients seeking yield enhancement in emerging market bonds.

Key risks investors should watch

Despite the improving narrative, the African Eurobond market remains a high‑beta, risk‑on trade. Key areas to monitor include the following:

• FX and refinancing risk: Most African Eurobonds are dollar‑denominated, whereas fiscal revenues are in local currency. Any renewed dollar strength or export-earnings shock can quickly strain debt-service capacity.
• Concentration risk in stressed credits: Some of the sought‑after African yields still sit in countries with elevated CDS (e.g., certain post‑restructuring SSA sovereignties), where spreads may not fully price reinstatement risk.
• Policy and governance uncertainty: Political volatility, fiscal slippage, or delays in implementing IMF‑backed reforms can abruptly widen spreads, as seen during earlier episodes in Nigeria and Ghana.

For asset managers, the prudent approach is credit‑selective exposure, favoring countries with strong institutions, transparent fiscal frameworks, and demonstrable reform progress, even if they trade at relatively lower spreads.

Opportunities in the Africa Eurobond market

For global institutional investors, the current Africa Eurobond environment offers several strategic opportunities:

• Yield pick‑up versus EM peers: African sovereigns still offer meaningful yield differentials versus many Latin American and Asian emerging‑market issuers, especially after the recent spread‑compression rally.
• Roll‑over and maturity‑ladder optimisation: With a wave of maturing Eurobonds now being refinanced at lower coupon levels, treasuries can extend durations and improve liability structures, reducing near‑term rollover stress.
• Front‑loaded alpha via selective entry: Investors entering via primary‑market bids or early‑secondary purchases in relatively liquid names (e.g., Morocco, Côte d’Ivoire, Egypt) can capitalise on both yield carry and potential spread‑tightening if macro conditions remain stable.

In a diversified EM bond book, a moderate, high‑quality allocation to Africa’s Eurobond market can boost blended returns without mechanically amplifying volatility.

Conclusion

Africa’s Eurobond market has transitioned from a period of forced inactivity to a cautiously constructive re-entry phase. The combination of moderating global rates, IMF-backed policy discipline, and post-restructuring clarity has reopened access to international capital for several sovereigns. Pricing has improved materially, and investor demand, particularly from institutional EM debt allocators, has returned with depth.

However, this is not a uniform recovery. The market remains bifurcated between stronger, reform-aligned credits and higher-risk, post-distress issuers. Yields, while lower than 2023 peaks, still embed significant risk premia, reflecting persistent vulnerabilities: FX exposure, refinancing pressure, and policy execution risk.

For sophisticated investors, the opportunity lies in selective exposure prioritizing credits with credible fiscal frameworks, external support mechanisms, and transparent governance. In that context, Africa is less a broad beta trade and more a targeted alpha environment.

Position your portfolio to capture high-yield opportunities in Africa’s recovering sovereign debt markets with Global Banking Markets (GBM), your strategic partner in emerging market fixed income.

At GBM, we help institutional investors navigate Africa’s Eurobond market comeback with precision, leveraging deep expertise across frontier and emerging economies. As global interest rates stabilize and investor appetite for yield strengthens, African sovereign bonds are re-emerging as a compelling asset class, offering attractive spreads, portfolio diversification, and alpha potential.

Unlock Opportunities in Africa’s Eurobond Market

As Africa’s Eurobond landscape evolves, selectivity and timing are critical. GBM equips you with the tools, insights, and market access needed to identify creditworthy issuers, optimize entry points, and manage downside risks effectively.

Partner with Global Banking Markets (GBM) to capitalize on Africa’s sovereign debt opportunities and strengthen your emerging market investment strategy.