Nigeria’s financial markets opened the month on a downturn as both the naira and equities weakened sharply on Monday, following remarks by United States President Donald Trump hinting at possible military action against Nigeria over alleged religious persecution.
According to The PUNCH, the figures from the Central Bank of Nigeria showed that the naira, which previously traded at a year-high of ₦1,421.73 per dollar, depreciated to ₦1,436.34/$, representing a loss of 1.03 per cent within a day.
The currency also declined in the parallel market to ₦1,455 per dollar, a movement analysts associated with heightened investor uncertainty and rising foreign exchange demand.
The losses came after Trump, in a statement shared on his Truth Social platform over the weekend, described Nigeria as a “country of particular concern” and alleged that Christians were being targeted in what he termed a “genocide.”
He said he had instructed the U.S. Department of War to “prepare for possible action” should the situation persist, remarks that immediately triggered global debate and concern over Nigeria’s diplomatic and economic stability.
The tension spilled into the equities market, where trading resumed on a bearish note.
The All-Share Index of the Nigerian Exchange Limited fell by 0.25 per cent, closing at 153,739.11 points, while market capitalisation dropped by ₦245.88 billion to settle at ₦97.58 trillion. The decline was driven mainly by sell-offs in key stocks, including Aradel Holdings, which fell by 9.21 per cent, and Access Corporation, which declined by 3.07 per cent.
Investor sentiment remained generally weak, with more companies recording losses than gains, and overall trading activity dropped as both transaction volume and value fell sharply. United Bank for Africa accounted for the largest share of the day’s trading value and volume.
Market performance across sectors was mixed, with Oil and Gas, Commodities, Insurance, and Banking segments all recording declines, while Consumer Goods saw a slight improvement. The Industrial sector ended the session unchanged.
In the fixed-income market, investor demand for Nigeria’s Eurobonds also weakened. Data from Cowry Assets Management indicated that average yields rose to 7.70 per cent, reflecting increased caution among global investors reacting to geopolitical uncertainty.
Bloomberg reported that Nigeria’s dollar-denominated bonds were among the worst-performing in emerging markets on Monday, with notes maturing in 2047 recording the steepest losses before later recovering some ground.
Despite the pressure on the markets, some analysts believe the reaction is likely temporary.
The Chief Executive Officer of CFG Advisory, Tilewa Adebajo, described the market response as exaggerated. “This appears to be a mere blip,” he said.
He remained optimistic about Nigeria’s long-term prospects: “Global market indicators are already showing signs of recovery. With Nigeria recently removed from the FATF Grey List, there are still strong long-term fundamentals supporting the market.”
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Musa Yusuf, warned that the situation could have more serious implications if not carefully managed.
Yusuf criticized the US President’s remarks, stating: “The threat of military action from the U.S. President is unwarranted and economically destabilising.”
He detailed the negative impact of such rhetoric: “Such statements heighten risk perception, shake investor confidence and undermine economic stability.” He stressed that while Nigeria must strengthen internal security measures and governance, engagement with foreign powers must be based on cooperation.
Yusuf advocated for a diplomatic approach: “Unilateral intervention would undermine Nigeria’s sovereignty and worsen humanitarian and economic conditions. Diplomacy and mutual respect remain the constructive path forward,” he added.
