The local African currency (LCY) bond market remained bearish in April, with the AFMI Bloomberg African Index shedding 4.40% in April—the worst performance in 25 months. These weak sentiments may have primarily reflected the second-order effects of the Russia-Ukraine war, which continues to pressure global inflation. In addition, global central banks appeared to have shown a greater disposition to tightening, despite weaker growth expectations.

With the 50bps rate increase in the U.S and the sustained risk-off sentiments of foreign investors, the prognosis is for yield uptrend to persist across African bond markets. Another notable concern for some foreign investors could be the likelihood that pass-through from the Russia-Ukraine war may continue to drive elevated inflation, currency weakness, and less appealing carry trade opportunities in Africa.