While the intent to combat religious violence is noble, the collateral damage to the nation’s economy, Tinubu’s administration, and investors is huge
By Josef Onoh
The United States President, Donald Trump, on Saturday designated Nigeria as a “Country of Particular Concern” (CPC), alleging that there are severe violations of religious freedom with widespread persecution and killings of Christians by radical Islamist groups such as Boko Haram, ISWAP, and Fulani militants.
Trump’s announcement via Truth Social and echoed by the White House, revives a painful chapter from the first Trump administration and signals an existential threat to Nigeria’s stability, prosperity, and global standing. While the intent to combat religious violence is noble, the collateral damage to the nation’s economy, Tinubu’s administration, and investors—both local and international—will be catastrophic.
This is not mere rhetoric; rather, it is a clarion call for urgent introspection and action, lest Nigeria descend further into isolation and economic peril. The Tinubu administration must accept, to an extent, its failure and nonchalant approach in appointing Ambassadors, considering the rush and manner they were recalled two years ago by your administration, and today’s designation is an awakening to that failure.
The CPC designation, under the International Religious Freedom Act (IRFA) of 1998, is not a symbolic slap on the wrist. It empowers the U.S. government to impose a spectrum of punitive measures, including economic sanctions, restrictions on foreign aid, trade barriers, and visa limitations on officials implicated in violations.
For Nigeria, Africa’s largest economy and a nation already grappling with inflation exceeding 30%, naira depreciation, and foreign exchange shortages, this could trigger a cascade of local and international repercussions. Domestically, the designation will exacerbate Nigeria’s fragility with US aid, which totalled over $1 billion annually in recent years for health, education, and security, facing suspension or redirection.
Programs combating HIV/AIDS, maternal health, and agricultural development—critical for rural communities in the Middle Belt, where much of the violence occurs—could grind to a halt, leading to heightened poverty and food insecurity.
Small and medium enterprises (SMEs), which employ over 80% of our workforce, will suffer as supply chains are disrupted imported machinery and inputs from U.S. partners in manufacturing hubs like Aba and Kano could face tariffs or delays, inflating production costs by 15-20%.
Remittances from the Nigerian diaspora in the U.S., a lifeline worth $25 billion yearly, may dwindle if visa restrictions extend to families, further straining household incomes and consumer spending. In the agricultural heartlands, where Fulani attacks have already displaced millions, investor flight could slash GDP growth projections from 3.3% to below 2%, per IMF estimates for sanctioned economies, fuelling unemployment and social unrest.
Globally, Nigeria’s image as a stable investment destination will shatter. The designation amplifies perceptions of systemic risk, deterring foreign direct investment (FDI) in key sectors like oil and gas, which account for 90% of export revenues. Multinationals such as Chevron and ExxonMobil, already cautious amid divestment trends, may accelerate exits, echoing the $10 billion in delayed projects following Nigeria’s 2020 CPC listing.
Trade under the African Growth and Opportunity Act (AGOA) could be jeopardized, with U.S. tariffs on Nigerian textiles and petrochemicals potentially rising by 10-15%, costing exporters $500 million annually. Credit ratings from agencies like Moody’s and Fitch will likely be downgraded further—from B2 to Caa1—triggering higher borrowing costs on Eurobonds and reducing access to the $3 billion in annual FDI inflows.
Emerging markets like ours, reliant on portfolio investments, will see capital outflows as funds pivot to “safer African peers like Kenya or Ghana, widening our current account deficit and pressuring the naira toward ₦2,000 per dollar. In sum, this designation risks a 1-2% contraction in GDP over the next 18 months, compounding the economic woes inherited by the Tinubu administration’s reforms and pushing millions deeper into multidimensional poverty.”
President Tinubu’s administration was sworn in amid promises of economic renewal and security overhaul, but with the CPC label’s arrival is a diplomatic thunderbolt, undermining Tinubu’s nascent agenda.
The Nigerian government, which has touted partnerships with the U.S. on counterterrorism and climate finance, now faces isolation. U.S. congressional scrutiny—evident in recent bills like H.R. 5625 calling for sanctions on complicit officials—could blacklist key figures, including security chiefs, under the Global Magnitsky Act, freezing assets and travel.
Political jobbers in Tinubu’s administration are already touting that the designation was promoted by the opposition, which I can affirmatively tell you is false; they are also accusing Biafra promoters in diaspora, which is also false. The problem was evident from the first day you assembled your cabinet and unfortunately bringing in outsiders who attacked you during the campaign and their sudden love for you was simply to create more obstacles for your administration as evident with the embarrassing outcome of the Mike Arnold, former Mayor of Blanco, Texas, saga who was brought in not to save your administration but to complicate it and truly today’s designation is a triumph for them and an awakening for you to overhaul your entire cabinet and multiple ineffective communication team,” Onoh told Tinubu.
Its important to know that Trump’s tag erodes executive credibility, as seen in the backlash to the 2020 designation, which strained ties and delayed $600 million in Millennium Challenge Corporation compacts. Politically, it fractures national unity. Northern governors and Muslim stakeholders may decry it as biased, ignoring banditry’s non-sectarian roots, while southern Christian leaders demand accountability, polarizing the National Assembly. Internationally.
ECOWAS chairmanship—pivotal in resolving Sahel crises—loses luster, as U.S. allies like the UK and EU echo the concerns, stalling joint ventures in green energy and digital infrastructure. Domestically, public trust in the Renewed Hope evaporates if aid cuts hit social programs, sparking protests akin to those over fuel subsidy removal. Ultimately, this designation hampers fiscal space for reforms, with aid shortfalls forcing austerity that could balloon the debt-to-GDP ratio beyond 50%.
Investors, the lifeblood of growth, will bear the brunt, with the CPC acting as a red flag in risk assessments. Hedge funds and sovereign wealth entities from the U.S., Europe, and Asia will pull back, citing “force majeure” in contracts.
In 2020, post-designation FDI in Nigeria’s power sector dropped 25%, and a repeat could stall $15 billion in upstream oil investments. Pension giants like CalPERS may divest from Nigerian bonds, while tech VCs—eyeing Lagos as Africa’s Silicon Valley—halt funding for startups, fearing compliance headaches under U.S. sanctions regimes.
Nigerian tycoons and diaspora returnees, channelling billions into real estate and agribusiness, will retreat to safer assets. Banks like Access and Zenith, with $5 billion in U.S. exposure, face liquidity squeezes from correspondent banking freezes, hiking lending rates to 25% and choking SME credit. Family businesses in volatile regions like Plateau State, already hit by insecurity, will shutter, amplifying job losses in a youth-bulging population.
This investor exodus not only starves innovation but perpetuates a vicious cycle: reduced revenues mean less security spending, prolonging the very violence that invited the designation. Finally, Mr. President, this is a fork in the road—despair or determination. The CPC is not irreversible; history shows nations like Uzbekistan shed it through targeted reforms. Under IRFA, redesignation occurs annually, hinging on progress against systematic, ongoing, and egregious violations.
I urge a multi-pronged strategy to demonstrate unequivocal commitment, aiming for removal by the 2026 review: Convene a National Religious Freedom Summit Immediate; Bolster Security and Justice Reforms (Short-Term – 6 Months); Engage U.S. Stakeholders Diplomatically; Economic Safeguards and Transparency (Medium-Term – 12 Months), and Grassroots Empowerment.
Mr. President must act decisively, and this crisis becomes a catalyst for renewal. Unfortunately, the majority of your current cabinet composition is more Political than efficient; they lack the vision to deliver, especially your communication team. Nigeria’s 200 million souls deserve a future unmarred by division or despair. The world watches—let us prove our resilience.
