U.S. President’s comments trigger brief market reaction; analysts say impact likely to be short-lived as investors focus on reforms….
Nigeria’s sovereign bonds slipped on Monday following threats by U.S. President Donald Trump to take military action against the country if authorities fail to protect Christians from ongoing attacks.
Speaking on Sunday, Trump warned that the U.S. could deploy troops or carry out airstrikes in Nigeria, claiming there had been widespread killings of Christians. The comments immediately rattled global investors, leading to a brief sell-off in Nigeria’s longer-dated Eurobonds.
The 2051 bond issue fell about 0.5 cents before recovering slightly to trade just below 92 cents on the dollar, diverging from generally flat trading across most emerging market debt.
Nigeria Responds to Trump’s Comments
In response, the Federal Government said it would welcome U.S. assistance in the fight against terrorism and insurgency, provided that Nigeria’s sovereignty and territorial integrity are respected.
The country continues to grapple with multiple security challenges including Boko Haram and Islamic State-linked insurgencies in the Northeast, banditry in the Northwest, and farmer-herder conflicts in the Middle Belt. These clashes claimed at least 3,570 civilian lives in 2024, according to data from the Armed Conflict Location and Event Data Project (ACLED).
Market Reaction Limited
Despite the initial dip, market analysts said the impact of Trump’s remarks was largely contained.
“The dip seems contained and has partly reversed since,” a Standard Chartered strategist told Reuters, noting that Nigeria’s Eurobonds quickly stabilized after the brief sell-off.
Foreign investors have continued to show strong confidence in Nigeria’s markets this year, buoyed by economic reforms introduced by President Bola Tinubu including the removal of fuel subsidies and the liberalization of the naira.
According to data from Tellimer, Nigeria’s equities have surged about 65% year-to-date in U.S. dollar terms, making them the second-best performer in Africa’s emerging markets, behind Ghana.
Analysts Downplay Long-Term Risk
Market watchers say Trump’s comments are unlikely to have a lasting effect.
“My sense is that this will not become a major concern for the market,” said Kevin Daly, a fund manager at Aberdeen, adding that Nigerian authorities were expected to engage diplomatically with U.S. officials to defuse tensions.
Analysts also noted that any hypothetical U.S. strikes would likely target areas in northern or central Nigeria, which are far removed from the country’s main commercial and oil-producing hubs, such as Lagos and the Niger Delta.
“Even if military strikes were to occur which still looks very unlikely, the economic fallout would be minimal due to limited commercial activity in those regions,” said Hasnain Malik of Tellimer, describing Trump’s comments as “a red herring” for investors.
He emphasized that Nigeria’s investment outlook remains driven by economic policy reforms, improving valuations, and renewed investor interest rather than political rhetoric.
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