CORRELATION ANALYSIS OF 10-YEAR GOVERNMENT BOND YIELDS IN NIGERIA AND SELECTED AFRICAN COUNTRIES

Abstract

This study examines the relationship between yields of 10-year government bond in Nigeria with selected countries in Africa. The research employed the use of Pearson correlation method to examine relationship between bond yield in Nigeria and Kenya, Morocco, Namibia, and Uganda, by analysing data set on bond yield from January, 2017 to December, 2021. The study discovered that there is a positive correlation between government bond yield in Nigeria and other African countries. This therefore, limits bond spread between Nigeria and the chosen countries under study. The study also found that there is no sign of spread in government bond yields between Kenyan and Ugandan. However, Moroccan and Namibian bond yields relate negatively with each other, hence there is a danger of bond spread. The study recommends that in addition to adequate funding, low inflation rate, balanced exchange rate and stable interest rate should be ensured by the government so as to bring about increased aggregate bond market that will be attractive to investors