Financial experts and economists have explained why the United States of America’s president, Donald Trump’s designation of Nigeria as a Country of Particular Concern and threat to take military action on the country have caused a ripple of negative effects in Nigeria’s economy in the last 10 days.

This comes as the Nigerian Exchange Limited and the Naira have experienced a downturn since last week.

DAILY POST reports that NGX further continued its bearish trend on Monday after losing N2.8 trillion last week.

While NGX kept its bloodbath, the Naira also recorded losses across official and black markets on Monday to close at N1,437.29 per dollar.

Financial experts disclosed that this is directly linked to shaken investor confidence following Trump’s remarks.

Earlier, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, had predicted that Trump’s threat would weaken investors’ confidence in Nigeria.

Speaking, Mazi Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), and an economist and university don, Prof Godwin Oyedokun, explained to DAILY POST why Nigeria’s economy is bleeding due to Trump’s threat.

On his part, Unegbu said that the impact of US President Donald Trump’s comments on Nigeria was anticipated.

He explained that the pronouncement created fear among investors, leading to a decline in confidence and causing many to halt their investment plans on the Nigerian Exchange (NGX).

Unegbu acknowledged that Trump’s statement had ripple effects across all sectors of Nigeria’s economy but expressed doubt that the US leader would take any direct action against the country.

According to him, despite the current downturn, the period presents an opportunity for strategic investment.

He noted that previous gains in the foreign exchange market were not sustainable, stressing that Nigeria must increase local production to stabilise the naira.

He added that the decision to float the FX market would only yield positive results if the country reduces dependence on imports.

He further called for improved security to boost agricultural productivity and restore investor confidence in the Nigerian market.

According to him, “It is anticipated. When Trump made the statement, there was fear in the air, which has affected investors’ confidence. People have started to hold their investment plan for the NGX.

“This is a good time to invest in NGX anyway, from my experience as a financial analyst and stockbroker. In the aspect of the foreign exchange market, prior to now the gains are not real. Until Nigeria produces what is consumed.

“This is why the floating of the FX market will make sense.

“Indeed, Trump’s statement affected every aspect of the Nigerian economy. I feel Trump will not take any action on Nigeria. I don’t in Nigeria and Africa, Trump. I don’t think he is serious.”

On his part, Oyedokun said the recent sharp depreciation of the Naira and the over N2.8 trillion loss recorded in Nigeria’s equities market reflect rising investor anxiety following the designation of Nigeria as a “Country of Particular Concern” (CPC) by the United States.

Oyedokun noted that the development had not only triggered worries over Nigeria’s global reputation but also raised fears of possible diplomatic sanctions, capital flight and increased geopolitical risk.

He explained that international diplomacy and economic stability are closely connected, adding that foreign investors typically react swiftly to signals that suggest strained ties with key global powers.

According to him, the CPC designation is often linked to concerns around governance, security or human rights, which makes global markets sensitive to how affected countries respond.

He urged Nigerians to avoid panic-driven reactions such as speculative forex purchases or hurried withdrawal of investments, warning that such actions could worsen volatility in both the currency and capital markets.

“This development would understandably cause deep concern both for Nigeria’s economic stability and its global perception.

“The sudden depreciation of the Naira and a massive plunge of over N2.8 trillion in the equities market reflect shaken investor confidence, heightened geopolitical risk, and possible fears of sanctions or capital flight.

“From an analytical standpoint, such an event underscores how international diplomacy and domestic economic resilience are tightly intertwined.

“The designation of Nigeria as a “Country of Particular Concern” (CPC) signals serious international scrutiny, often tied to issues of human rights, governance, or security.

“Markets tend to react immediately to such signals because investors anticipate tougher external relations, potential trade restrictions, or military tensions that could disrupt economic activities.

“This development calls for a calm but deliberate strategic response rather than panic. Knee-jerk reactions, such as withdrawing investments or speculative forex trading, may worsen volatility. Both the government and citizens must recognise that confidence, not just capital, drives markets.

“In summary, while the immediate economic shock is severe, it also presents an opportunity for Nigeria to reflect on its international posture and domestic governance. A strong, transparent, and reform-oriented response can not only restore investor confidence but also reposition Nigeria more positively in the global arena.

“Stay rational and informed. Avoid being swayed by misinformation or panic-driven economic decisions.

“Diversify investments. Explore safer assets or sectors less exposed to foreign capital volatility.

“Encourage peace and diplomacy. Support constructive national dialogue and positive international engagement,” he said.

He added that the government should, “Engage diplomatically and transparently. Immediately open diplomatic channels with the U.S. to clarify concerns leading to the CPC designation. Effective communication and reforms can help reverse or mitigate the status.

“Stabilise the economy. The Central Bank and fiscal authorities should coordinate policies to manage liquidity, protect the Naira, and reassure investors through clear policy directions.”

“Address root causes. Strengthen human rights protection, rule of law, and governance reforms, demonstrating commitment to global standards.

“Enhance domestic resilience. Reduce overreliance on foreign perception by promoting industrial diversification, regional trade, and internal productivity,” he further told DAILY POST.