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By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has described United States President Donald Trump’s threat of military intervention in Nigeria as economically destabilising, saying it sends unsettling signals to investors.
Director of the Centre, Dr. Muda Yusuf, in his policy brief on the potential economic implications of the threat, warned that the remark carries far-reaching consequences for Nigeria’s economy and investor confidence.
Yusuf noted that, regardless of its inaccuracy, the pronouncement has already generated economic, diplomatic, and perceptional consequences for the country.
“The statement risks undermining the country’s image as a stable investment destination, unsettling financial markets, and eroding confidence among both domestic and international investors,” he said.
He lamented that such action by a global superpower has inflicted significant reputational damage on Nigeria’s image as a safe and viable investment destination. According to him, the rhetoric could trigger declines in foreign direct investment (FDI) inflows and capital flight from portfolio and equity investors.
Yusuf added that it could also lead to a drop in venture capital and startup funding, heightened country risk ratings, and increased investor anxiety.
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On financial market repercussions, the CPPE boss explained that market volatility would likely intensify as investors reassess Nigeria’s risk profile. He warned that the country could experience falling stock market valuations, rising risk premiums and insurance costs, higher sovereign bond yields, and naira depreciation resulting from capital outflows and portfolio reversals.
“An escalation in perceived geopolitical risk could tighten financial conditions and distort macroeconomic indicators,” he said.
“Nigeria may experience rising interest rates, a weakened currency, higher inflationary pressures, reduced foreign reserves, and lower external buffers. There could also be pressure on fiscal balances from increased defense spending and lower investment inflows.
“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.”
To mitigate these economic and perceptual risks, Yusuf advised that Nigeria must adopt a strategic and proactive diplomatic response. He recommended key policy measures such as high-level diplomatic engagement and immediate bilateral discussions with the U.S. government to clarify facts and de-escalate rhetoric.
He further urged the government to strengthen domestic policy through collaborative security partnerships and continued reforms in governance, transparency, and macroeconomic management to reinforce resilience against external shocks.
