The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that the recent threat of possible U.S. military action against Nigeria could have far-reaching economic and diplomatic repercussions, potentially undermining investor confidence and destabilising the country’s financial markets.
In a policy brief released on Monday, CPPE’s Director and Chief Executive Officer, Dr Muda Yusuf, described the statement reportedly made by U.S. President Donald Trump as “unwarranted, counterproductive, and economically destabilising.”
It warned that even a verbal threat from a global superpower could inflict significant damage on Nigeria’s reputation as a safe and viable investment destination.
Yusuf noted that while the statement appeared to have been based on incomplete intelligence and misjudged assumptions, its source amplified its potential impact on Nigeria’s economy.
“Such rhetoric risks unsettling financial markets, weakening the naira, and eroding confidence among domestic and international investors,” he said.
According to the policy brief, the threat has already generated economic, diplomatic, and perceptional consequences that could manifest in capital flight, a decline in foreign direct investment (FDI), and a reduction in venture capital inflows.
The think tank warned that the heightened risk perception could trigger market volatility, rising sovereign bond yields, higher country risk premiums, and weaker investor sentiment.
CPPE projected that continued uncertainty could push investors into a wait-and-see mode, leading to delayed or cancelled projects and the diversion of private equity and venture capital flows to other African or Asian economies perceived as more politically stable.
The policy institute further highlighted that Nigeria’s macroeconomic stability could come under severe pressure if geopolitical risks escalate.
Possible outcomes include a depreciation of the naira, higher inflation, rising interest rates, and depletion of foreign reserves. Fiscal balances could also worsen due to increased defence spending and reduced foreign inflows.
On the security context, the CPPE stressed that Nigeria’s internal security challenges are complex and multifaceted, driven by insurgency, terrorism, farmer-herder clashes, communal conflicts, and kidnapping, among others.
It emphasised that these are socio-economic and governance-driven issues, not state-sponsored conflicts, and that the Nigerian government has consistently prioritised defence and security in its national budgets.
Yusuf maintained that any suggestion of government complicity in these crises was misleading and unfair to the current administration. He said a nuanced understanding of Nigeria’s security dynamics was essential before any external actor contemplated military intervention.
To mitigate the economic and perceptional risks arising from the U.S. President’s remarks, the CPPE urged the Nigerian government to adopt a strategic and proactive diplomatic response. Recommended measures include high-level bilateral engagement with the U.S. government to clarify facts and de-escalate tensions, deepened collaboration on intelligence and counterterrorism, coordinated public communication to reassure investors, and continued reforms in governance and transparency.
“The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty,” Yusuf stated.
“Unilateral military action would not only destabilise Nigeria’s economy but also threaten regional stability and worsen humanitarian conditions.”
The CPPE reiterated its call for restraint, emphasising that global partners should support Nigeria through cooperation and constructive engagement rather than coercion or military threats.
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