Centre for the Promotion of Private Enterprise (CPPE) has listed the possible economic impacts the threat of a military action made by U.S President Donald Trump could have on the Nigerian economy.
The Centre’s Director and Chief Executive Officer, Dr. Muda Yusuf, in a policy brief, said the threat could inflict serious damage on Nigeria’s economy, investor confidence, and international standing.
He said the statement, though based on “incomplete intelligence and misjudged assumptions,” carries major economic and perceptional risks given its source; the President of the United States.
“Regardless of its inaccuracy, the pronouncement has already generated economic, diplomatic, and perceptional consequences for Nigeria,” Yusuf said.
“Such rhetoric risks undermining Nigeria’s image as a stable investment destination, unsettling financial markets, and eroding both domestic and international investor confidence.”
Possible impacts
The Centre cautioned that even the mere threat of U.S. military action could trigger capital flight, weaken the naira, and destabilize the financial markets.
According to the policy brief, potential effects include:
- A decline in foreign direct investment (FDI)
- Drop in portfolio inflows
- Rising sovereign bond yields
- Stock market volatility
- Increased inflationary pressures, and
- Reduced foreign reserves due to capital outflows
“An escalation in perceived geopolitical risk could tighten financial conditions, distort macroeconomic indicators, and strain Nigeria’s fiscal balance,” the report noted.
Yusuf cautioned that uncertainty could cause investors to suspend or cancel major projects, while venture capital and private equity funds might redirect investments to other African or Asian economies with lower political risk.
‘Nigeria’s security crisis Is complex, not government-engineered’
The CPPE emphasized that Nigeria’s security challenges are “complex, multifaceted, and asymmetrical,” driven by overlapping issues such as insurgency, farmer–herder clashes, communal conflicts, banditry, and kidnapping, not by religious persecution or government complicity.
Yusuf explained that victims of insecurity in Nigeria cut across all ethnic and religious lines, underscoring the socio-economic and governance-related roots of the crisis.
“Any suggestion of government complicity in these atrocities is grossly misleading and unfair to the present administration,” he stated. “A nuanced understanding of Nigeria’s security landscape is essential before any external actor contemplates military intervention.”
He added that successive governments have prioritized security, with defense and security consistently receiving the highest allocations in recent national budgets.
Calls for diplomatic engagement, not confrontation
To mitigate potential fallout, the CPPE urged the Federal Government to pursue a coordinated diplomatic and policy response.
It recommended high-level engagement with the U.S. to clarify facts, collaboration on intelligence and counterterrorism, and strategic communication to reassure investors of Nigeria’s stability.
The Centre also advised the government to reinforce internal policy fundamentals by improving governance, transparency, and macroeconomic management.
“The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty,” Yusuf said.
‘Unilateral U.S. action would destabilize Nigeria, region’
The CPPE concluded that unilateral military intervention by the U.S. would be “unwarranted, counterproductive, and economically destabilizing.”
“Such statements send unsettling signals to investors, heighten risk perception, and undermine confidence in Nigeria’s economy,” Yusuf warned. “Nigeria must continue strengthening its internal security architecture, but any external engagement should be cooperative, not coercive.”
He added that U.S. military action could worsen regional instability, escalate humanitarian crises, and reverse progress made in domestic reform and economic recovery.
What you should know
On Saturday, Trump had announced that he has instructed the Department of Defense to prepare for possible military intervention in Nigeria.
The move follows his repeated accusations that the Nigerian government has failed to curb violence against Christians, a claim Nigerian officials have consistently denied.
