Nigeria’s Stock Market Tumbles as Trump Threatens Invasion Over Alleged Genocide on Christians

Nigeria’s financial markets were rattled on Monday following a shocking statement by former U.S. President Donald Trump, who threatened to invade the country over what he described as “genocide against Christians.” The declaration triggered a wave of panic across investors, leading to sharp declines in both equity and bond markets, as well as renewed pressure on the naira.

At the close of trading, the Nigerian Exchange Limited (NGX) recorded significant losses, with the All-Share Index falling by 0.25 percent, and investors collectively losing ₦247 billion in market value. Market capitalization slipped from ₦97.829 trillion on Friday to ₦97.582 trillion, while the benchmark index dropped from 154,126.46 points to 153,739.11 points.

The downturn erased part of the market’s strong year-to-date gains, dragging total returns to 49.37 percent, as investors fled riskier assets amid concerns that Trump’s statements could heighten geopolitical tension and affect foreign capital inflows.

Trump’s comments, made via his Truth Social account over the weekend, accused Nigerian authorities of failing to stop the killings of Christians by extremist groups in the country’s northern region. He labeled Nigeria a “country of particular concern”, threatening to cut off U.S. aid and “invade to wipe out Islamic terrorists” allegedly responsible for the violence. He further claimed to have directed the Pentagon to “prepare for possible action.”

The remarks sent shockwaves through Nigeria’s financial markets, with analysts warning that the heightened political risk could erode recent gains made under the Tinubu administration’s economic reforms.

Before the week’s trading began, analysts from Futureview Financial Services had projected a rebound in the equity market, citing renewed investor interest in undervalued stocks and strong third-quarter corporate earnings. However, Trump’s inflammatory comments swiftly reversed sentiment.

Analysts at Coronation Research had also anticipated a “mild bullish tone” driven by bargain hunting, while CardinalStone Research noted that they were closely watching post-earnings reactions to position strategically. Those expectations were dashed as investors dumped Nigerian assets across multiple markets.

Eurobonds Suffer Broad Losses

Nigeria’s Eurobond market mirrored the domestic sell-off, with all 12 of the country’s dollar-denominated bonds recording losses on Monday. The FGN Eurobond 2047 suffered the steepest decline, shedding 0.6 cents on the dollar to trade at 88.26 cents.

According to Bloomberg data, Nigerian dollar bonds represented all 10 of the worst-performing emerging-market securities as of 10:45 a.m. in Lagos. The losses wiped out last week’s modest rally, during which the average yield on Nigerian Eurobonds had declined by 14 basis points to 7.49 percent.

Naira Weakens as Sentiment Sours

The naira also faced renewed downward pressure in the official foreign exchange (FX) market, weakening by one percent against the U.S. dollar. Data from the Central Bank of Nigeria (CBN) showed that the local currency closed at ₦1,436.34/$1, down from ₦1,421.73/$1 on Friday.

Interestingly, the naira gained marginally in the parallel market, appreciating by 1.04 percent to ₦1,440/$1, from ₦1,455/$1 previously. Market operators attributed this to a brief spike in cash inflows from speculative demand and dollar sales by some exporters.

Meanwhile, Nigeria’s external reserves rose to $43.19 billion as of October 31, reflecting slight inflows from crude oil receipts and foreign investments, according to the CBN.

A report by Coronation Merchant Bank revealed that total FX inflows through the Nigerian Foreign Exchange Market (NFEM) fell sharply to $1.04 billion, compared to $1.37 billion in the previous period. Foreign portfolio investors dominated inflows, accounting for 62.3 percent ($645.4 million), followed by exporters (15 percent), corporates (11.6 percent), foreign direct investment (1.9 percent), and other sources (9.2 percent).

Analysts Warn of Rising Risk Premium

Market watchers caution that Trump’s remarks could further raise Nigeria’s risk premium, making it more expensive for the country to borrow in global markets and discouraging foreign portfolio inflows. With investors already cautious due to inflationary pressures and exchange-rate volatility, additional political tension could deepen uncertainty.

Despite the setback, analysts remain hopeful that if the U.S. administration refrains from taking action and local reforms continue, market stability could return in the medium term. However, in the near term, sentiment is expected to remain fragile as global investors closely monitor diplomatic reactions and Nigeria’s next steps.