Financial analysts and economists have attributed Nigeria’s recent economic downturn to U.S. President Donald Trump’s designation of the country as a “Country of Particular Concern” and his threat of possible military action.
The move, which rattled investors, has triggered steep losses in the Nigerian Exchange (NGX) and a further depreciation of the naira. The NGX lost about ₦2.8 trillion last week, continuing its bearish run on Monday, while the naira closed at ₦1,437.29 per dollar across official and parallel markets.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, had earlier warned that Trump’s comments could erode investor confidence—a prediction now playing out across financial markets.
Former President of the Chartered Institute of Bankers of Nigeria, Mazi Okechukwu Unegbu, said the reaction was expected. According to him, Trump’s remarks created panic, prompting investors to suspend or withdraw planned investments.
He added that despite the temporary shock, the downturn could present buying opportunities for long-term investors. Unegbu emphasised the need for Nigeria to strengthen local production and improve security to stabilise the naira and restore market confidence.
“It was anticipated. When Trump made the statement, fear spread among investors, affecting the NGX. This is a good time to invest, but sustainable recovery depends on increased domestic production,” he said.
Similarly, Professor Godwin Oyedokun, an economist and academic, linked the ₦2.8 trillion market loss and naira’s sharp decline to growing investor anxiety over Nigeria’s global image and potential diplomatic sanctions.
He explained that international investors often react swiftly to political and diplomatic tensions, noting that the “Country of Particular Concern” tag signals worries about governance, security, or human rights.
Oyedokun urged both investors and policymakers to avoid panic-driven actions, stressing that confidence—not just capital—drives markets.
“This development calls for calm and strategic response. Panic withdrawals or speculative forex trading could worsen volatility,” he advised.
He recommended that the government immediately engage the U.S. diplomatically to clarify issues leading to the designation, strengthen economic management, and address governance and human rights concerns.
“A reform-driven and transparent response can restore investor confidence and reposition Nigeria positively on the global stage,” he added.