Rockets have already hit… for now, the bond valuations. Nigeria is losing after Trump's threats

The value of Nigerian dollar bonds fell sharply on Monday following US President Donald Trump's threats of potential military action and the suspension of aid to Nigeria.

According to Bloomberg, the sharpest declines occurred in bonds maturing in 2047.

Muda Yusuf, director general of the Center for the Promotion of Private Enterprise (CPPE), in a statement to the media on Monday said that the threat of military action from a global superpower has already caused significant damage for Nigeria's image as a safe and profitable investment destination.

Nigerian economists, including Bosun Obembe, a financial analyst in Lagos, say that the American president's threats could undo recent reform successes and undermine the government's effortsaimed at attracting foreign investors, which will quickly affect the very fragile position of the local currency, the naira.

Christopher Akinbobola, a tax expert from Lagos, added in an interview with Nigeria's “Businessday” that the president's statement The US will likely lead to foreign investors withdrawing from the Nigerian market.

The US president's comments could also significantly impact Nigeria's plans to issue Eurobonds worth around $2.3 billion, as investors may perceive Nigeria as a high-risk country, which could dampen their sentiment.

US Foreign Assistance data shows that The United States and its allies have provided more than $7.8 billion in security and humanitarian assistance to Nigeria over the past 10 years. The freezing or suspension of this aid announced by Trump could significantly deepen the budget deficit of the country, which is struggling to recover from several years of deep crisis.

On Friday, President Trump declared Nigeria a “particular threat country,” and on Saturday he threatened to withhold all aid to him and invade to “destroy Islamic terrorists” who are committing genocide against Christians. On the same day, the president ordered the Pentagon to prepare for possible military action.

In Liberia, Trump's sudden decision to defend Christians is seen as revenge against Nigeria, which has not yielded to repeated pressure to accept immigrants deported from the US, often convicted of serious crimes. Liberia, which in October quietly agreed to the American request and accepted an illegal immigrant from El Salvador convicted in the United States, received specific benefits in the form of a zero visa fee, unheard of in other African countries, and an extension of most entry visas to the United States to three months, although it does not meet any of the American migration conditions.

From Monrovia Tadeusz Brzozowski (PAP)

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