Barclays Says Shift to Shorter Nigerian Eurobonds – Here’s Why It Matters
If you’re holding long-dated Nigerian Eurobonds, Barclays has a word for you: shorten your duration now.
The global investment bank is advising its clients to rotate into shorter-maturity Nigerian dollar bonds, citing attractive risk-reward trade-offs amid policy uncertainty and macro shifts.
This isn’t just a yield play it’s a risk-control strategy in a fragile fiscal climate.
Let’s break it down.
What’s Barclays Saying?
Barclays strategists have flagged that:
- Long-dated Nigerian bonds (2038 and beyond) have seen high volatility
- Investors should now look at 2029 and 2031 bonds, which are offering solid returns with lower risk duration
They maintain a neutral stance overall on Nigeria’s Eurobonds, but favour shorter notes given:
- Fiscal uncertainties
- Global rate sensitivity
- Local currency dynamics
Why Shorter Bonds Look Better Right Now
- Duration Risk
Longer bonds are more exposed to rate hikes and FX shocks any policy wobble hits them harder.
- Liquidity Advantage
Shorter maturities are more liquid and easier to offload, especially during market stress.
- Naira Still in Play
Naira volatility and FX backlogs add another layer of risk for offshore bondholders.
Financial Juggernut Insight
If you’re a retail or institutional investor:
- Monitor credit spreads on 2029–2031 notes
- Don’t chase high yield without checking duration and default buffers
- Use shorter bonds as bridge plays while watching fiscal reforms unfold