Uncertainty surrounding U.S. financial policy is shaking global markets, as concerns mount over America's ballooning debt and a weakening dollar. For Nigerian entrepreneurs, importers, and investors, these shifts could have real implications for trade, currency stability, and international payments.
The U.S. national debt has now surpassed $36.2 trillion, equal to around 120% of its annual economic output. Investors are growing wary, pushing the yields on long-term U.S. bonds above 5% in May, before settling around 4.8% in June. Higher yields reflect increased skepticism about the U.S. government's ability to manage its rising obligations.
A key driver behind market fears is a major legislative proposal that would extend large tax cuts — a move experts warn could add another $3–4 trillion to U.S. debt.
"This is shaking confidence among investors globally," says Gregoire Kounowski, an advisor at asset management firm Norman K.
Why Nigerian Businesses Should Care
The U.S. dollar long considered a global safe haven has lost more than 10% of its value in 2025, marking its worst half-year performance since 1973. This decline affects Nigerian businesses in several ways:
Import costs may fluctuate as the naira-dollar exchange rate responds to global volatility.
Exporters paid in USD may see reduced earnings if the dollar weakens further.
Dollar-denominated investments may need to be re-evaluated.
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Foreign governments like China, Japan, and the U.K. are also adjusting their positions, with China shifting reserves toward gold instead of rolling over maturing U.S. bonds.
Shift Toward the Euro
As doubts grow over the dollar's long-term stability, many investors are turning to the euro and European government bonds. According to the European Central Bank, European financial markets are now seen as more attractive and stable than they have been since the 2011 debt crisis.
"In times of uncertainty, investors look for reliable stores of value," said ECB executive Imene Rahmouni-Rousseau. "This year, the euro has taken on that role."
What Can Nigerian SMEs Do?
Track exchange rate trends closely and adjust pricing strategies where needed.
Hedge currency risk if your business relies heavily on U.S. dollar transactions.
Stay updated on international developments that can impact local financing and trade.
As U.S. financial dynamics continue to shift, Nigerian businesses must remain informed and agile. Global uncertainty may be growing but with the right strategies, local businesses can still stay ahead.
