How Trump's Threat Can Affect Nigeria's Economy - Expert

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Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has expressed concerns that United States President Donald Trump’s threat of military action over alleged Christian genocide could have far-reaching implications for Nigeria’s economy and investors’ confidence.

The renowned economist shared his thoughts on the matter in a statement on Monday, November 3.

He said Trump’s threat risks undermining Nigeria’s image as a stable investment destination, unsettling financial markets, and eroding confidence among both domestic and international investors.

Pinnacle Daily reported that Trump had, over the weekend, threatened to use military action against Nigeria if the government continues to allow the killing of Christians by Islamic terrorists, who he said are committing these horrible atrocities.

Highlighting how it could impact investors’ confidence and perception, Yusuf said, “Even 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.”

He pointed out that such rhetoric could trigger declines in foreign direct investment (FDI) inflows, capital flight from portfolio and equity investors, a decline in venture capital and startup funding, and heightened Nigeria’s risk ratings and investor anxiety.

It could also have repercussions on the financial market, he said. “Market volatility would likely intensify as investors reassess Nigeria’s risk profile.

“The likely consequences include falling stock market valuations, rising country risk premiums and insurance costs, higher sovereign bond yields, and naira depreciation due to capital outflows and portfolio reversals.

“An escalation in perceived geopolitical risk could tighten financial conditions and distort macroeconomic indicators.”

The CPPE boss said Nigeria might experience rising interest rates, a weakened currency and higher inflationary pressures, reduced foreign reserves and lower external buffers, pressure on fiscal balances from increased defence spending, and lower investment inflows.

It could further impact investment and business sentiment, he added.

“Uncertainty and fear would lead investors to adopt a wait-and-see posture, delaying or cancelling major projects. Private equity and venture funds may diversify away from Nigeria toward peer economies in Africa or Asia with lower perceived political risk,” Yusuf said.

To mitigate the economic and perceptional risks, the renowned economist suggested that Nigeria adopt a strategic and proactive diplomatic response.

He listed key policy measures to be adopted to include high-level diplomatic engagement, urging immediate bilateral discussions with the U.S. government to clarify facts and de-escalate rhetoric.

Others are deepening cooperation with the U.S. and regional partners on intelligence, counterterrorism, and peacebuilding; coordinated public messaging to reassure domestic and international investors of Nigeria’s stability; and continued reforms in governance, transparency, and macroeconomic management to reinforce resilience against external shocks.

Yusuf, however, condemned the threat, stating, “The U.S. President’s threat of military intervention in Nigeria is unwarranted, counterproductive, and economically destabilising. It is a disproportionate response that fails to reflect the complexity of Nigeria’s internal security dynamics.
Such statements send unsettling signals to investors, heighten risk perception, and undermine confidence in Nigeria’s economy.

He added, “While Nigeria must continue to strengthen internal security architecture and governance, any external engagement should be cooperative—not coercive.

“Unilateral military action would destabilise Nigeria’s economy, threaten regional stability, and aggravate humanitarian conditions. The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty.”

Nigeria faces multifaceted security challenges

According to the CPPE boss, Nigeria’s security challenges are complex, multifaceted, and asymmetrical, saying that the situations do not constitute a conventional war scenario but rather involve overlapping issues including insurgency and terrorism, farmer–herder clashes, ethnic and communal conflicts, banditry and kidnapping, armed robbery, and boundary disputes.

“The victims of these conflicts cut across all religious and ethnic lines, underscoring that the crises are not state-engineered but socio-economic and governance-driven. The Nigerian government has consistently prioritised security, with defence and security allocations constituting the highest share of recent national budgets.

“Any suggestion of government complicity in these atrocities is grossly misleading and unfair to the present administration. A nuanced understanding of the country’s complex security landscape is essential before any external actor contemplates military intervention,” Yusuf added.

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