The Centre for the Promotion of Private Enterprise (CPPE) has warned that the recent threat of possible military action against Nigeria by former US President Donald Trump could damage investor confidence and create economic instability.
According to Dr. Muda Yusuf, the CPPE’s Director and Chief Executive Officer, such rhetoric can trigger declines in foreign direct investment inflows, capital flight from portfolio and equity investors, and a decline in venture capital and startup funding.
The CPPE policy brief highlights that the threat could lead to market volatility, falling stock prices, rising country risk premiums, and naira depreciation due to capital flight and reduced portfolio investment.
The organisation describes Trump’s statement as unnecessary and potentially damaging, warning that any unilateral action would destabilise the economy and create regional tension.
To mitigate these risks, the CPPE recommends that the Nigerian government adopt a diplomatic and strategic response by opening immediate talks with US officials to clarify the situation.
The organisation also advises closer collaboration with international partners to maintain stability and reassure investors of Nigeria’s economic strength and commitment to reform.
The CPPE Emphasises that Nigeria’s economic diversification is crucial to reducing its reliance on oil and mitigating external market shocks.
The organisation suggests that the government should focus on promoting domestic production of goods and services, export development, and ensuring economic resilience to minimise vulnerabilities to external shocks.
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