Lagos, Nov. 4., 2025 – The redesignation of Nigeria as a Country of Particular Concern (CPC) by Donald Trump, the U.S President, could undermine Nigeria’s image as a stable investment destination.
It could also unsettle its financial markets and erode confidence among both domestic and international investors.
The Centre for the Promotion of Private Enterprise (CPPE) made the observations in a policy brief issued in Lagos by its Chief Executive, Muda Yusuf.
It said the threat of possible military action against Nigeria carried far-reaching implications for the Nigerian economy and investor confidence.
“Although the statement appears to have been made on the basis of incomplete intelligence and misjudged assumptions, its source — the President of the United States — magnifies its potential impact.
“Such statements send unsettling signals to investors, heighten risk perception, and undermine confidence in Nigeria’s economy.
“While Nigeria must continue to strengthen internal security architecture and governance, any external engagement should be cooperative — not coercive.
“Unilateral military action would destabilize Nigeria’s economy, threaten regional stability, and aggravate humanitarian conditions.
“The constructive path forward lies in diplomacy, partnership, and shared commitment to peace, development, and mutual respect for sovereignty,” it said.
The CPPE said the erosion of investor confidence and perception in Nigeria could lead to declines in foreign direct investment (FDI) inflows, capital flight from portfolio and equity investors, a decline in venture capital and startup funding as wells as heightened country risk ratings and investor anxiety
It said the repercussions of the redesignation of Nigeria on the financial market could lead to falling stock market valuations, rising risk premiums and insurance costs, higher sovereign bond yields and naira depreciation due to capital outflows and portfolio reversals
At the macroeconomic level, the CPPE said the consequences could be rising interest rates, higher inflationary pressures, reduction in foreign reserves and pressure on fiscal balances.
The centre advised that Nigeria must adopt a strategic and proactive diplomatic response to mitigate these likely effects through high-level diplomatic engagement and collaborative security partnership by deepening cooperation with U.S. and regional partners on intelligence, counterterrorism, and peacebuilding.
It also suggested strategic communication through coordinated public messaging to reassure domestic and international investors of Nigeria’s stability.
The CPPE said the country must continue its reforms in governance, transparency, and macroeconomic management to reinforce resilience against external shocks.
