Core Viewpoint - The recent military threats from U.S. President Trump have led to a significant decline in Nigerian assets, including a sharp drop in Nigerian dollar bonds and the naira currency, marking a period of heightened economic instability for Nigeria [1][3][4]. Economic Impact - Nigerian dollar bonds experienced a widespread decline, with the 2047 maturity bond dropping by 0.6 cents to a price of 88.26 cents per dollar, making it one of the worst-performing bonds in emerging markets [1]. - The naira depreciated by 1.47% against the dollar, reaching an exchange rate of 1 USD to 1424.59 NGN, which is the largest daily drop since June [1]. - U.S. foreign aid to Nigeria was approximately $550 million this year, down from $880 million last year, indicating a reliance on U.S. support for security and economic stability [10]. Military and Political Context - Trump indicated the possibility of deploying ground troops or conducting airstrikes in Nigeria to address the alleged large-scale killings of Christians, which he claims pose a survival threat to the Christian community [3][4]. - The Nigerian government, under President Tinubu, has publicly rejected Trump's claims, asserting that they are not reflective of the actual situation and emphasizing their commitment to combating terrorism and promoting religious harmony [5][7]. - The ongoing violence from extremist groups like Boko Haram has escalated over the past decade, complicating Nigeria's security landscape and prompting U.S. military training and arms sales to enhance Nigeria's capabilities against such threats [8][10]. Investment Climate - Despite the current tensions, Nigeria remains an attractive destination for foreign investment, bolstered by economic reforms initiated by President Tinubu, such as the removal of costly fuel subsidies and allowing the naira to depreciate [10]. - The Nigerian stock market has seen a total return increase of approximately 65% in USD terms this year, making it one of the best-performing markets in Africa, second only to Ghana [11].