Nigerian government securities are delivering positive real returns as the country’s disinflationary trend accelerates, according to market analysis from Nairametrics.
Treasury bills and Federal Government of Nigeria (FGN) bonds are now yielding more than the prevailing inflation rate, marking a significant shift for investors who have long contended with negative real yields in the West African economy.
The improvement in real returns reflects a broader stabilization in Nigeria’s macroeconomic environment.
As inflation rates cool, the fixed nominal yields on government debt effectively gain purchasing power, making local currency bonds more attractive to both domestic and international investors seeking yield without currency hedging costs.
This development comes as global markets digest mixed signals from US data, where cooler inflation prints have tempered expectations for further Federal Reserve rate hikes.
While US 10-year Treasury yields have seen volatility due to geopolitical tensions in the Middle East, emerging market debt like Nigeria’s is benefiting from its own domestic disinflationary cycle.