The Centre for the Promotion of Private Enterprise has warned that the recent threat of possible military action against Nigeria by former United States President Donald Trump could damage investor confidence and create economic instability.
In a policy document released on Monday, the group explained that Trump’s statement could have far-reaching effects on Nigeria’s economy, noting that comments from such a powerful global figure can influence market perception and investor behaviour. The centre stated that the warning from the U.S. president, even without any immediate action, had already affected how international investors view Nigeria’s business environment.
The statement noted that fears arising from the threat could cause investors to pull funds from the Nigerian stock market, reduce foreign direct investment, and discourage venture capital inflows. It warned that the move might also increase the country’s risk ratings, leading to higher borrowing costs, weaker currency performance, and reduced access to international capital.
The organisation further observed that financial markets could experience volatility as investors reassess Nigeria’s risk profile. It explained that the possible outcomes include falling stock prices, rising insurance costs, and naira depreciation due to capital flight and reduced portfolio investment.
The centre also cautioned that if uncertainty continues, it could pressure the country’s financial system. It added that higher interest rates, weakened reserves, and declining investor confidence might worsen inflation and fiscal stress, especially if the government increases defence spending to counter perceived threats.
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The group urged the Nigerian government to adopt a diplomatic and strategic response by opening immediate talks with U.S. officials to clarify the situation. It also advised closer collaboration with international partners to maintain stability and reassure investors of Nigeria’s economic strength and commitment to reform.
The policy brief described Trump’s statement as unnecessary and potentially damaging, warning that any unilateral action would destabilise the economy and create regional tension. It called for dialogue and cooperation as the best approach to resolving security challenges while protecting Nigeria’s sovereignty and economic growth.
President Bola Tinubu had earlier dismissed Trump’s claims, stating that Nigeria upholds religious freedom and continues to engage both Christian and Muslim leaders to promote unity and peace across the country.
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