Nigeria's Bond Yields to Remain High Until Q4 2026

High bond yields in Nigeria are projected to continue until the fourth quarter of 2026, influenced by persistent inflation and stringent regulatory adjustments, according to a macroeconomic report from Coron Asset Management. The domestic debt market is expected to remain heavily skewed towards elevated yields due to ongoing macroeconomic pressures.

The Central Bank of Nigeria has adopted a hawkish monetary policy stance to combat money supply growth, utilizing tools such as open market operations and increasing treasury bill auction volumes. This has resulted in high borrowing costs, complicating the fiscal deficit management for the federal government.

Inflation in Nigeria rose to 15.93% year-on-year in May 2026, marking the third consecutive monthly increase, with food inflation accelerating to 16.96%. Meristem Research warns that any temporary relief from global energy costs may be short-lived, as geopolitical tensions, particularly between the U.S. and Iran, could reignite upward pressure on global oil prices, further complicating the interest rate outlook.