For the first time in a decade, no African country has a sovereign risk premium in distress territory.

The average additional yield on Mozambique’s bonds over US Treasuries fell below 1 000 basis points this month, making it the last country on the continent to retreat from levels widely considered to indicate debt distress. It’s the first time since 2015 that no African country has had a four-digit yield spread, according to JPMorgan Chase & Co. data.

That era of widespread debt distress, built on cheap borrowing and expansionary fiscal policies, culminated in a crisis during the Covid pandemic when Zambia, Ghana, Malawi and Ethiopia defaulted on their bonds. Amid lockdowns and global interest-rate hikes, many more countries on the continent witnessed varying levels of financial stress.

Since then, inflation has moderated, Zambia and Ghana have restructured their debt with bilateral creditors and bondholders, and other countries including Kenya have regained access to capital markets. The International Monetary Fund (IMF) has approved several rescue packages, which in turn, have sparked reform stories.

“We have observed fundamental improvements across several countries in Sub-Saharan Africa, aided by IMF programmes, as well as some domestically driven reform stories,” said Joseph Cuthbertson, a sovereign analyst at PineBridge Investments in London.

The continent-wide exit from distress territory doesn’t mean the debt crisis is over, though. Ethiopia, which failed to make a payment on its lone dollar bond in 2023, remains in default and has made little progress with bondholders to restructure it.

And while national-level risk premiums have improved, some individual bonds continue to trade at distressed premiums. Senegal’s bonds have plunged and its yield curve has inverted. While its overall risk premium remains under 1 000 basis points, the yield on Senegal’s March 2028 note trades at about 1 200 basis points above US Treasury yields.

Senegal’s bonds extended losses after news that government debt reached 119% of gross domestic product, more than previously thought. President Bassirou Diomaye Faye is grappling with soaring interest payments and a widening budget deficit due to misreported economic data inherited from his predecessor.

Of the 303 sovereign dollar bonds out of Africa tracked by Bloomberg, only six are currently trading at distressed levels. Seven trade at less than 70 cents on the dollar, compared with 22 a year ago.

With the era of distress on the continent waning and high-yield sovereign bonds continuing to outperform investment-grade bonds across emerging markets, African debt could be attractive for some investors looking for shelter from global risks related to US President Donald Trump’s trade policies.

“Spreads have remain resilient to geopolitical developments in June and still-uncertain trade negotiations,” said Samir Gadio, head of Africa strategy at Standard Chartered Plc. “Given tight EM credit spreads, it makes sense for investors to squeeze value in higher-yielding sovereigns.”