This paper critically examines the United States’ designation of Nigeria as a Country of Particular Concern (CPC) under the InternationalReligiousFreedomAct, interrogating its broader diplomatic, socioeconomic, and policy implications through the lens of political economy. While the designation was ostensibly motivated by concerns over religious persecution and attacks on Christians, it operates within a complex web of power asymmetries, international norms, and soft sanctions. Drawing on qualitative descriptive analysis of official documents, policy statements, and international reports, the study situates the CPC designation within historical U.S.–Nigeria relations, exploring how moral diplomacy intersects with economic sovereignty and international image politics. The analysis reveals that beyond its symbolic dimension, the CPC label has subtle yet significant ripple effects: dampening investor confidence, straining bilateral engagements, and compelling Nigeria to recalibrate its internal governance posture. Using Dependency Theory and Constructivism, the study argues that such designations reinforce hierarchical power relations between the Global North and South, where moral authority becomes a tool of geopolitical influence. It further contends that Nigeria’s response, oscillating between defensive sovereignty and cautious reform, illustrates the tensions developing states face in balancing domestic pluralism with external expectations. The paper concludes by recommendingproactive diplomacy, institutional strengthening, and regional ownership of human rights narratives to transform external scrutiny into internal development momentum