CPPE warns of capital flight, economic instability, others amid US military threat

The recent threat of possible military action against Nigeria by the President of the United States, President Donald Trump, carries far-reaching implications for the Nigerian economy and investor confidence.

The Centre for the Promotion of Private Enterprise (CPPE) said the comment, which appeared to be based on “incomplete intelligence and misjudged assumptions,” had already generated perceptional and economic consequences for Nigeria.

The Centre for the Promotion of Private Enterprise (CPPE) has also warned that the recent threat of possible military action against Nigeria by the US President Donald Trump could have far-reaching economic and diplomatic implications for the country.

In a policy brief signed by its Dr Muda Yusuf, Director/Chief Executive Officer, Centre For The Promotion Of Private Enterprise (CPPE), noted that

the statement risks undermining the country’s image as a stable investment destination, unsettling financial markets, and eroding confidence among both domestic and international

Recall that Trump had suggested that there could be military action against Nigeria, a day after alleging that there was genocide against Nigerian Christians and also placed Nigeria on the list of Countries of Particular Concern (CPC).

The CPPE said the remarks, even if not acted upon, 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; Heightened country risk ratings and investor anxiety.

He pointed out market volatility would likely intensify as investors reassess Nigeria’s risk profile with likely consequences such as: Falling stock market valuations; Rising country risk premiums and insurance costs; Higher sovereign bond yields; Naira depreciation due to capital outflows and portfolio reversals.

According to him, uncertainty and fear would lead investors to adopt a wait-and-see posture, delaying or cancelling major projects, while private equity and venture funds may diversify away from Nigeria toward peer economies in Africa or Asia with lower perceived political risk.

The Centre explained that Nigeria’s security challenges were complex and home-grown, driven largely by socio-economic and governance factors rather than state complicity.

It noted that the conflicts, including insurgency, farmer–herder clashes, banditry, and communal violence, cut across all ethnic and religious groups.

Accordingly, Dr Yusuf mulled that to mitigate these economic and perceptional risks, Nigeria must adopt a strategic and proactive diplomatic response which should include: “High-Level Diplomatic Engagement: Immediate bilateral discussions with the U.S. government to clarify facts and de-escalate rhetoric.

“Collaborative Security Partnership: Deepening cooperation with U.S. and regional partners on intelligence, counterterrorism, and peacebuilding.

“Strategic Communication: Coordinated public messaging to reassure domestic and international investors of Nigeria’s stability.

“Strengthening Domestic Policy Fundamentals: Continued reforms in governance, transparency, and macroeconomic management to reinforce resilience against external shocks.”

The CPPE boss described the U.S. President’s threat of military intervention in Nigeria as unwarranted, counterproductive, and economically destabilizing, stressing that it is a disproportionate response that fails to reflect the complexity of Nigeria’s internal security dynamics.

“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,” Dr. Yusuf emphasized.