The Nigerian economy has experienced a significant downturn in recent days, with the Nigerian Exchange Limited (NGX) and the Naira both suffering losses. This development comes on the heels of a statement by former US President Donald Trump, designating Nigeria as a “Country of Particular Concern” and threatening potential military action. Financial experts and economists have attributed the economic instability to shaken investor confidence following Trump’s remarks.
The NGX has continued its bearish trend, losing N2.8 trillion last week, while the Naira has also recorded losses across official and black markets, closing at N1,437.29 per dollar on Monday. According to Mazi Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria, the impact of Trump’s comments was anticipated, creating fear among investors and leading to a decline in confidence.
Unegbu expressed doubt that the US would take direct action against Nigeria but acknowledged that the statement had ripple effects across all sectors of the economy. He emphasized the need for improved security to boost agricultural productivity and restore investor confidence in the Nigerian market. Unegbu also noted that the current downturn presents an opportunity for strategic investment, stressing that Nigeria must increase local production to stabilize the Naira.
Professor Godwin Oyedokun, an economist, attributed the recent sharp depreciation of the Naira and the loss recorded in Nigeria’s equities market to rising investor anxiety following the US designation. Oyedokun noted that international diplomacy and economic stability are closely connected, and foreign investors typically react swiftly to signals that suggest strained ties with key global powers. He urged Nigerians to avoid panic-driven reactions, such as speculative forex purchases or hurried withdrawal of investments, which could worsen volatility in both the currency and capital markets.
Oyedokun recommended a calm but deliberate strategic response, recognizing that confidence, not just capital, drives markets. He advised the government to engage diplomatically and transparently with the US, address root causes such as human rights protection and governance reforms, and enhance domestic resilience by promoting industrial diversification and internal productivity. As the Nigerian economy continues to navigate this challenging period, it remains to be seen how the government and citizens will respond to the current situation and work towards restoring investor confidence and stabilizing the economy.