Trump’s Threats Trigger Volatility in Nigerian Stock Market and Naira

The recent public threat by U.S. President Donald Trump to intervene militarily in Nigeria has ignited sharp reactions across Nigerian financial markets, according to economists and market analysts. They warn that while the immediate impact is visible, the longer-term economic consequences could prove more substantial if investor confidence is not restored.

Following Trump’s statement in early November 2025 — in which he accused Nigeria of failing to protect Christians and directed the U.S. Department of Defence to prepare for possible action — Nigerian markets reacted swiftly. The local currency, the naira, fell ~1 % against the dollar in official trading, and as much as 1.4 % in the parallel market, with rates reaching about ₦1,460 to the dollar. Simultaneously, equities and bonds sold off: Nigeria’s stock market registered a drop of 1.19 % on one trading day, and market capitalisation declined by over ₦1.3 trillion in just three sessions.

Economists at the Centre for the Promotion of Private Enterprise (CPPE) cautioned that the risk extends beyond market jitters into potential capital flight, higher country risk ratings and a weaker currency over time. These indicators, they argue, reflect the vulnerability of Nigeria’s economy to external shocks and reputational risks tied to political statements of this nature. On the other hand, some international analysts, such as those at Oxford Economics, have played down the longer-term economic damage, noting that trade links and Nigeria’s core oil exports remain relatively secure despite the rhetoric.

In light of these developments, some recommended steps for stabilisation include accelerated diplomatic engagement with the U.S., reassurances to foreign investors about Nigeria’s stability, and a clear articulation of Nigeria’s strategy on security and foreign policy that aligns with macro-economic stability efforts. While the immediate drop in equity value and currency erosion are measurable, the real test will be how swiftly and credibly Nigeria responds to restore investor and market confidence.

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