There are concerns that the election of Donald Trump as the 47th President of the United States could lead to increased inflationary pressure in Nigeria and a decline in global oil prices, impacting Nigeria’s oil revenue.
An investor note from FXTM discussed the potential implications of Trump’s presidency on Nigeria’s economy. The note, authored by Senior Market Analyst Lukman Otunuga, warned of negative impacts based on Trump’s policies.
Otunuga highlighted that Trump’s focus on boosting domestic oil and gas production could lead to oversupply, driving down oil prices. This, coupled with potential US economic growth and inflationary pressures, might result in a stronger dollar and lower oil prices, affecting major oil-producing countries like Nigeria.
The note also mentioned the market reactions following Trump’s victory, with the dollar and Bitcoin surging. The dollar saw significant gains against the yen, euro, and Mexican peso, while Bitcoin reached a record high.
Additionally, expectations of tax cuts, tariffs, and inflation under Trump’s presidency boosted market confidence, with futures indicating a positive outlook for US equities.
Otunuga suggested that Trump’s return to the White House could bring about market volatility, with assets tied to the “Trump trade” likely to benefit. Past volatility under Trump’s administration was highlighted, with potential impacts on global trade, interest rates, and geopolitical tensions.