Naira and Stocks Fall as President Trump’s Threat of Military Action Shakes Nigerian Markets

Naira and Stocks Fall as President Trump’s Threat of Military Action Shakes Nigerian Markets

Nigeria’s financial markets started November 2025 on a weak footing as both the naira and equities recorded steep declines following remarks by U.S. President Donald Trump, who threatened potential military action against Nigeria over alleged religious persecution.

Fresh data from the Central Bank of Nigeria (CBN) showed that the naira, which had previously reached a 2025 peak of ₦1,421.73 per U.S. dollar, depreciated to ₦1,436.34/$ on Monday — a 1.03% loss or ₦14.61 in a single day. In the parallel market, the currency also weakened to around ₦1,455/$, underscoring growing investor unease and surging foreign exchange demand.

Trump’s Remarks Trigger Global Reactions

The sharp selloff came after a tense weekend, when Trump, writing on his Truth Social platform, designated Nigeria as a “country of particular concern” and instructed the U.S. Department of War to prepare for “possible action” if alleged killings of Christians continue.

Trump described the situation as a “Christian genocide,” igniting international criticism and debate about the diplomatic and economic consequences for Africa’s largest economy.

Equities Market Declines as Investor Sentiment Wavers

At the Nigerian Exchange Limited (NGX), the mood turned bearish on Monday, with the All-Share Index (ASI) dropping 0.25% to 153,739.11 points, trimming the year-to-date gains to 49.37%. The market capitalization also declined by ₦245.88 billion, closing at ₦97.58 trillion.

The downturn was led by losses in Aradel Holdings (-9.21%) and Access Corporation (-3.07%), while Union Dicon emerged as the top gainer (+9.93%). Honeywell Flour Mills led the losers with a 10% decline.

Market activity slowed significantly, with volume and value traded falling 87.94% and 44.64%, respectively, to 627.5 million units worth ₦25 billion. United Bank for Africa (UBA) dominated trading, accounting for 21.8% of total volume and 22.2% of total value.

Sector Performance and Bond Market Reaction

Across sectors, performance was mixed.

Oil & Gas (-3.94%), Commodities (-1.85%), Insurance (-1.48%), and Banking (-0.22%) all closed lower.

Consumer Goods saw a mild rebound of +0.49%, while Industrial Goods remained flat.

In the bond market, investor demand for Nigeria’s Eurobonds weakened, with average yields climbing 5 basis points to 7.70%, according to Cowry Assets Management. The firm cited rising global risk aversion, macroeconomic uncertainty, and geopolitical pressure as the main drivers.

Bloomberg reported that Nigeria’s dollar-denominated bonds were the worst performers among emerging markets on Monday, with all ten notes ranking among global underperformers. Bonds maturing in 2047 recorded the steepest drop, falling 0.6 cents to 88.26 cents per dollar before regaining some ground later in the day.

Analysts Split on Outlook

Market analysts offered divergent views on the sustainability of the selloff.

Tilewa Adebajo, CEO of CFG Advisory, described the market reaction as a temporary “blip.”

“This shock is unlikely to last,” he said. “With Nigeria’s recent removal from the FATF Grey List and stable macro fundamentals, investor confidence should recover once tensions ease.”

However, Dr. Musa Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), warned that Trump’s rhetoric could cause lasting damage to investor confidence.

“The U.S. President’s threat of military intervention is unwarranted, counterproductive, and economically destabilizing,” Yusuf stated. “Such comments heighten risk perception and weaken market confidence.”

He added that while Nigeria must continue to strengthen security and governance, engagement with foreign powers must be “cooperative, not coercive.”

“Unilateral military action would destabilize the Nigerian economy, threaten regional peace, and worsen humanitarian challenges. The constructive path forward lies in diplomacy and partnership,” he concluded.

Path Forward: Diplomacy and Market Stability

As investors await further clarification on U.S. policy and Nigeria’s diplomatic response, analysts emphasize that restoring calm and market stability will depend on consistent communication from the Federal Government and the Central Bank of Nigeria (CBN).

For now, markets remain on edge — balancing between geopolitical uncertainty and Nigeria’s long-term economic fundamentals.

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