Nigeria’s economy has been in disarray for over a week following U.S. President Donald Trump’s decision to designate the country as a Country of Particular Concern (CPC) and his accompanying warning of possible military intervention.
According to financial analysts, the announcement has triggered widespread market instability, with both the Nigerian Exchange Limited (NGX) and the naira suffering sharp declines.
Gossip News Now reports that the NGX, which lost ₦2.8 trillion in value last week, continued to plunge on Monday. Meanwhile, the naira weakened further, closing at ₦1,437.29/$ on the official market and depreciating across parallel exchange windows.
Experts believe the turmoil reflects a deep erosion of investor confidence and growing unease over Nigeria’s international reputation.
Former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, told Daily Post that the response from investors was expected, as global markets typically react swiftly to political signals from powerful nations.
Unegbu explained that Trump’s remarks generated widespread uncertainty, prompting investors to either suspend or cancel ongoing investment plans.
He noted that the psychological ripple effect led to heavy sell-offs on the NGX, large-scale capital flight, and an abrupt slowdown in foreign investment inflows. However, he expressed doubt that the U.S. president would actually make good on his military threat.
The veteran banker further observed that the situation exposed the underlying weaknesses in Nigeria’s economy, arguing that recent foreign exchange stability had been largely artificial given the country’s heavy dependence on imports.
He emphasized that the current crisis should push Nigeria toward more strategic, production-driven investments, adding that genuine recovery will only happen if the nation expands its manufacturing and export capacity.
Unegbu also highlighted insecurity as a major obstacle to agricultural growth and industrial productivity — both of which are critical to restoring the naira’s value and achieving long-term economic stability.
‘Fear of Sanctions and Capital Flight Triggered Market Crash’ – Prof. Oyedokun
Economist and university lecturer, Prof. Godwin Oyedokun, has attributed the naira’s steep decline and the ₦2.8 trillion crash in equities to more than ordinary market fluctuations, saying the development reflects deep-seated investor anxiety.
According to Oyedokun, both local and foreign investors interpret Nigeria’s recent designation as a Country of Particular Concern (CPC) as a sign of deteriorating diplomatic ties and heightened political risk.
He explained that the global financial market reacts swiftly to geopolitical uncertainty, noting that foreign investors often move their capital out of countries that appear at risk of sanctions or conflict.
The academic further stated that a CPC classification typically raises red flags around governance, human rights, and security issues — all of which can spook investors. He added that even without direct sanctions, the designation alone can lead to fears of travel bans, reduced international cooperation, and barriers to global financing.
Oyedokun also pointed out that the sharp fall of the naira indicates a surge in dollar demand, as many Nigerians rushed to convert their savings amid fears of worsening instability.
He cautioned that such panic-driven actions only intensify market volatility and could keep the currency under sustained pressure in the coming weeks.
‘Stay Calm; Nigeria Must Respond Strategically’ – Prof. Oyedokun
Economist Prof. Godwin Oyedokun has urged Nigerians to remain composed and avoid making impulsive financial decisions amid the current economic turmoil.
He warned that mass withdrawals from the stock market, hoarding of dollars, or speculative buying would only worsen the crisis.
Oyedokun stressed that market confidence is fundamental, and Nigeria must restore trust by demonstrating a well-coordinated response to its designation as a Country of Particular Concern (CPC).
He advised citizens to stay informed, act rationally, and avoid being influenced by social media misinformation that could drive panic-driven decisions.
The professor noted that while the immediate economic impact is significant, it also offers Nigeria a chance to reassess governance, strengthen institutions, and enhance its international image.
He recommended that the federal government urgently engage in diplomatic dialogue with the United States to clarify the CPC designation, arguing that transparent communication could calm investor fears and limit further speculation.
Oyedokun also highlighted the role of the Central Bank and fiscal authorities, emphasizing the need for coordinated action to stabilise the financial system, support the naira, and reassure both local and foreign investors through clear policy signals.
He pointed out that Nigeria cannot ignore the governance and security challenges that contributed to the current tension. Strengthening the rule of law, protecting human rights, and addressing insecurity are essential steps to regain global investor confidence.
The economist further explained that Nigeria’s vulnerability stems in part from its reliance on foreign markets and global perception. He advocated for economic diversification, boosting local production, expanding regional trade, and reducing dependence on external borrowing to build resilience.
Oyedokun concluded that although the situation is unsettling, it could serve as a catalyst for long-overdue reforms that would fortify the nation’s economy in the long term.
Naija News reports that with the naira weakening, stock values tumbling, and investors adopting cautious positions, analysts predict that the coming days will be critical.
Market observers caution that without decisive government intervention through diplomacy and stabilising policies, the current turbulence could persist longer than expected.
Trump’s recent statements have exposed Nigeria’s susceptibility to external shocks and underscored the urgent need for structural reforms and stronger international relations.
