Trump’s War Threat Shakes Nigeria: Naira Crashes, Stock Market Wipes Out ₦2.8 Trillion In Hours

The United States President, Donald Trump’s decision to designate Nigeria as a Country of Particular Concern (CPC), along with his threat of possible military action, has thrown the nation’s economy into disarray for over a week.....KINDLY READ THE FULL STORY HERE▶

Financial analysts report that both the Nigerian Exchange Limited (NGX) and the naira have suffered major losses since the announcement. The NGX, which already shed ₦2.8 trillion last week, continued its decline on Monday, while the naira further depreciated to ₦1,437.29/$ at the official window and weakened further across the parallel market.

Economists attribute the trend to shaken investor confidence and growing anxiety over Nigeria’s global image.

Former President of the Chartered Institute of Bankers of Nigeria, Mazi Okechukwu Unegbu, told Daily Post that the market reaction was predictable, explaining that global investors often respond swiftly to political signals from major world powers.

According to Unegbu, Trump’s statement created a wave of uncertainty, causing investors to pause, delay, or completely withdraw investment plans. He said the psychological impact was powerful enough to trigger sell-offs on the NGX, capital flight, and a sharp decline in new inflows.

While noting that the immediate panic cut across several sectors, Unegbu doubted that the U.S. president would actually execute military action against Nigeria. He added that the episode revealed the fragility of the country’s economic fundamentals.

Unegbu further argued that earlier gains in the foreign exchange market were artificial, as Nigeria still heavily depends on imports. He urged the government to focus on improving productive capacity, noting that true economic recovery would only occur when the nation invests strategically in self-sufficiency.

He also warned that insecurity continues to hinder agricultural and industrial output, both of which are critical to stabilising the naira.

‘Fear of sanctions and capital flight drove the plunge’ – Oyedokun

Economist and university lecturer, Prof. Godwin Oyedokun, said the naira’s sharp depreciation and the ₦2.8 trillion stock market loss go beyond ordinary market volatility.

He explained that the market downturn reflects deep-seated fears among both foreign and domestic investors who see the CPC designation as a sign of strained diplomatic relations.

According to Oyedokun, the global financial system is highly sensitive to political risk, and investors tend to pull out their funds rapidly when a nation faces the threat of sanctions or instability.

He added that a CPC classification typically signals concerns about governance, human rights, or security — factors that instantly unsettle investors who fear travel bans, reduced international cooperation, or limited access to foreign finance.

Oyedokun also noted that the steep fall of the naira showed how Nigerians rushed to buy dollars in anticipation of further economic uncertainty, a reaction that only deepens market volatility and weakens the currency further.

‘Avoid panic; Nigeria must respond strategically’

Despite the turbulence, Oyedokun urged Nigerians to remain calm and avoid emotional financial decisions such as panic withdrawals or speculative dollar buying, warning that such actions could worsen the crisis.

He stressed that confidence is the backbone of any market and called for a clear, coordinated government response to restore investor trust.

The economist urged the federal government to engage the United States diplomatically to clarify Nigeria’s CPC status and communicate transparently to calm investor fears.

He also called for close coordination between the Central Bank and fiscal authorities to stabilise the naira and reassure both local and foreign investors through decisive policy measures.

Oyedokun emphasised that Nigeria must not ignore the governance and security challenges that contributed to its current vulnerability. Strengthening institutions, protecting human rights, and tackling insecurity, he said, would help rebuild the country’s credibility and resilience.

He concluded that while the immediate shock is painful, it also presents an opportunity for Nigeria to adopt overdue reforms — from diversifying the economy and boosting local production to reducing external borrowing and dependence on foreign markets.

With the naira weakening, stocks falling, and investors staying cautious, market watchers warn that the coming days will be crucial. Unless the government moves swiftly through diplomacy and strong policy action, the economic turbulence may persist longer than expected.

For now, Trump’s remarks have laid bare Nigeria’s susceptibility to external shocks and underlined the urgent need for structural reforms and stronger international engagement.