Nigerian financial markets fell on Monday after U.S. President Donald Trump threatened possible military action and a cutoff of U.S. aid to the country. The comments added new political tension to a market already struggling with weak investor confidence.
Trump had said over the weekend that the U.S. could send troops or launch air strikes to stop the killings of Christians in Nigeria by Islamist militants. He also warned that American aid – worth about $1 billion in 2023 – could be withdrawn.
The remarks sparked concerns among investors and fears of strained relations between the two countries.
The Nigerian Stock Exchange continued its losing streak, with the All-Share Index falling 0.25% to 153,739.10 points, wiping out about ₦240 billion in market value. This was the fifth straight loss since late October, except for a brief rebound on October 31.
Nigeria’s dollar bonds were also hit hard, ranking among the worst-performing emerging-market bonds on Monday. The long-term bond maturing in 2047 dropped by 0.6 cents on the dollar before recovering slightly, according to Bloomberg.
The naira weakened too, sliding 1.2% to ₦1,442.80 per dollar in the official market – its biggest single-day fall since June and the sharpest among major developing countries that day.
Analysts said Trump’s remarks added shock to an already fragile market but weren’t the only cause of the losses.
“The market was already weak due to economic pressures,” Anders Faergemann of PineBridge Investments told Bloomberg. “Trump’s comments just added to investor anxiety, but things should settle down soon.”
New risk for investors
President Bola Tinubu rejected Trump’s comments that Nigeria was hostile to Christians, saying they ignored his government’s efforts to protect freedom of religion for all citizens.
The selloff comes even as investor sentiment toward Nigeria had been improving earlier this year. Since Tinubu took office in 2023, the government has removed a costly fuel subsidy and freed up the currency market, attracting more foreign investors. Nigeria’s bonds had recovered from near-debt-distress levels, and the stock market had gained nearly 60% in dollar terms this year.
Still, analysts say Trump’s unexpected warning has added a new risk for investors just as Nigeria is trying to rebuild confidence.
Nigeria, with a population of about 230 million people, is almost evenly split between Christians and Muslims. The country continues to battle a 15-year Islamist insurgency in the northeast that has killed tens of thousands of people.
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