CPPE lists possible economic impacts of U.S. military threat on Nigeria

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The Centre for the Promotion of Private Enterprise (CPPE) has warned that the recent threat of military intervention in Nigeria issued by U.S. President Donald Trump could have severe consequences for the country’s economy, investor confidence, and global reputation.

In a policy brief released on Monday, the Centre’s Director and Chief Executive Officer, Dr. Muda Yusuf, said the pronouncement—though based on “incomplete intelligence and misjudged assumptions”—carries serious economic and perceptional risks given its source.

“Regardless of its inaccuracy, the pronouncement has already generated economic, diplomatic, and perceptional consequences for Nigeria,” Yusuf stated.
“Such rhetoric risks undermining Nigeria’s image as a stable investment destination, unsettling financial markets, and eroding both domestic and international investor confidence.”

Potential Economic Fallout

The CPPE cautioned that even the mere threat of a U.S. military strike could trigger capital flight, weaken the naira, and destabilize financial markets.

According to the policy analysis, possible ripple effects include:

A decline in foreign direct investment (FDI)
Drop in portfolio inflows
Rising sovereign bond yields
Heightened stock market volatility
Increased inflationary pressures
Reduced foreign reserves due to capital outflows

“An escalation in perceived geopolitical risk could tighten financial conditions, distort macroeconomic indicators, and strain Nigeria’s fiscal balance,” the report said.

Dr. Yusuf further warned that investor uncertainty could lead to the suspension or cancellation of major projects, while venture capital and private equity funds might redirect capital to other African or Asian markets perceived as politically safer.

‘Nigeria’s Security Crisis Is Complex, Not Government-Engineered’

The CPPE stressed that Nigeria’s ongoing insecurity is “complex, multifaceted, and asymmetrical”, driven by overlapping challenges such as insurgency, farmer–herder clashes, banditry, and kidnapping—not by religious persecution or government complicity.

“Victims of insecurity in Nigeria cut across all ethnic and religious lines,” Yusuf said.
“Any suggestion of government complicity in these atrocities is grossly misleading and unfair to the present administration.”

He noted that successive governments have prioritized security, with defense and security consistently receiving the largest allocations in national budgets.

Call for Diplomacy, Not Confrontation

To mitigate the potential economic and diplomatic fallout, the CPPE urged the Federal Government to adopt a coordinated response strategy centered on engagement and transparency.

It recommended:

High-level diplomatic dialogue with Washington to clarify facts;
Collaboration on intelligence sharing and counterterrorism;
Strategic communication to reassure investors of Nigeria’s stability; and
Strengthening internal governance and macroeconomic management.

“The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty,” Yusuf said.

‘Unilateral U.S. Action Would Destabilize Nigeria and the Region’

The Centre concluded that any unilateral U.S. military intervention in Nigeria would be “unwarranted, counterproductive, and economically destabilizing.”

“Such statements send unsettling signals to investors, heighten risk perception, and undermine confidence in Nigeria’s economy,” Yusuf warned.
“Nigeria must continue strengthening its internal security architecture, but any external engagement should be cooperative, not coercive.”

The CPPE further cautioned that an intervention could exacerbate regional instability, fuel humanitarian crises, and reverse economic recovery gains.

Background

On Saturday, U.S. President Donald Trump announced that he had instructed the Department of Defense to prepare for possible military intervention in Nigeria.

The move followed Trump’s allegations that the Nigerian government has failed to protect Christians from violence—a claim that Nigerian authorities have consistently denied, insisting that terrorist attacks in the country are not religiously motivated but rather part of a broader security crisis.