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The Centre for Promotion of Private Enterprise (CPPE) is warning that the recent threat of possible military action against Nigeria by the United States president, Donald Trump, could damage investor confidence, trigger capital threat, and destabilise the country’s financial markets.
The private sector think tank said on Monday that although the decision appeared to be based on “incomplete intelligence and misjudged assumptions, its source — the President of the United States — magnifies its potential impact.
According to the organisation, the pronouncement has already generated “economic, diplomatic, and perceptional consequences” capable of undermining Nigeria’s image as a stable investment destination. CPPE warned that such rhetoric could lead to foreign direct investment (FDI) declines, portfolio outflows, and rising risk premiums on Nigerian assets.
Muda Yusuf, CPPE’s director and chief executive officer, said, “The U.S. President’s threat of military intervention in Nigeria is unwarranted, counterproductive, and economically destabilising.”
Already, the skies are beginning to turn grey. BusinessDay reported on Tuesday that Nigeria’s stocks fell by 0.25 percent to N247bn loss at the end of Monday’s trading.
Read also: Naira holds firm in black market despite Trump’s threat
“The record dip in Nigeria’s stock market in the first trading day in November impacted its returns year-to-date (YtD), which stood lower at +49.37 percent,” BusinessDay said.
The naira also depreciated by one percent against the dollar in the official foreign exchange market following the negative sentiment fuelled by Trump’s threat. Nigeria’s national currency lost N14.61 against the dollar, closing at N1,436.34 at the Nigerian Foreign Exchange Market (NFEM) on Monday, compared to N1,421.73/ dollar it quoted on Friday.
“The mere threat of military action by a global superpower has inflicted significant reputational damage on Nigeria’s image as a safe and viable investment destination,” CPPE’s brief stated.
To mitigate the potential economic fallout, CPPE urged the Federal Government to engage in high-level diplomatic discussions with the U.S. government to clarify facts and de-escalate tensions.
It also recommended strengthening strategic communication to reassure both domestic and international investors of Nigeria’s stability, while continuing reforms in governance and macroeconomic management to enhance resilience against external shocks.
“The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty,” Yusuf said.
