US military threat may trigger capital flight, market instability

The Centre for the Promotion of Private Enterprise (CPPE) has warned that the recent threat of possible military action against Nigeria by the US President Donald Trump could have far-reaching economic and diplomatic implications for the country.

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In a policy brief signed by its Director, Muda Yusuf, on Monday, the think tank said the comment, which appeared to be based on “incomplete intelligence and misjudged assumptions,” had already generated perceptional and economic consequences for Nigeria.

It cautioned that the statement could undermine investor confidence and weaken the country’s image as a stable investment destination.

On Saturday, Mr Trump suugested that there could be military action against Nigeria, a day after alleging that there was genocide against Nigerian Christians. He also placed Nigeria on the list of Countries of Particular Concern (CPC).

The CPPE said the remarks, even if not acted upon, could lead to capital flight and market volatility.

“Such rhetoric can trigger declines in foreign direct investment (FDI) inflows, capital flight from portfolio and equity investors, a decline in venture capital and startup funding, heightened country risk ratings and investor anxiety,” the group said.

It warned that the perceived threat from a global superpower could unsettle financial markets, increase risk premiums, and pressure the naira as investors reassess Nigeria’s risk profile. “Market volatility would likely intensify as investors reassess Nigeria’s risk profile,” CPPE stated.

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The think tank explained that Nigeria’s security challenges were complex and home-grown, driven largely by socio-economic and governance factors rather than state complicity.

READ ALSO; Alleged Christian Genocide: US ambassador invites Nicki Minaj for discussions

It noted that the conflicts, including insurgency, farmer–herder clashes, banditry, and communal violence, cut across all ethnic and religious groups.

CPPE urged the Nigerian government to respond through proactive diplomacy and strategic engagement with the US authorities. It recommended bilateral discussions to clarify facts, as well as deeper security cooperation on intelligence and counter-terrorism.

The group also called for stronger domestic reforms in governance, transparency, and macroeconomic management to bolster resilience against external shocks.

It said that military action or the threat of it would be “unwarranted, counterproductive, and economically destabilising,” warning that it could threaten regional stability and worsen humanitarian conditions.

CPPE said diplomacy, partnership, and mutual respect for sovereignty offered the only constructive path forward.