Nigeria’s planned Capital gains tax unsettles market, drops 5%

By: ThinkBusiness Africa

The planned changes to Nigeria’s Capital Gains Tax (CGT) regime, has caused a huge selloff in the country’s stock exchange market as investors sought to lock-in profit before implementation begins in January next year.

According to Bloomberg, the Nigerian Stock Exchange (NGX), All Share Index fell  5% on Tuesday crashing from N94.5 trillion on Monday to N89.8 trillion. The NGX has been on a downward trend for seven straight days, the longest losing streak since August 1, 2024.

Victor Aluyi, co-managing partner at Aztran Global Investments, noted that the new CGT doesn’t sit well with investors as they’re yet to understand its full implications; Calling for more clarity from the authorities in its implementations.

The central issue is the substantial increase in the corporate CGT rate from 10% to 30% by the Nigerian authorities, aligning it with the Companies Income Tax rate, and the move to tax individual capital gains at their Personal Income Tax (PIT) rate up to 25%.

“It’s the whole capital-gains-tax issue, a bit more clarity is needed on it,” Victor said commenting on the latest drop in NGX.

This significant tax change now enacted under the Nigeria Tax Act (NTA) of 2025, has raised concern for sell-offs before the 2026 effective date as investors seek to lock in gains under the lower 10% rate.

Due to this panic sell Nigerian Exchange All-Share Index (NGX-ASI) experienced a catastrophic single-day loss of 5.01% on Tuesday. This plunge brought the index down to 141,327.30 points from  148,781.90 on Monday. An estimated N4.61 trillion was wiped out in a single session.

Stocks worth over One Trillion Naira called  ‘SWOOTs’ fell by approximately N2.75 trillion, or 3.2%, closing lower with a combined market capitalisation of N83.337 trillion.

Between last week Monday (November 3),and Monday (November 10), 2025, the combined market capitalisation of the 22 SWOOT stocks declined by approximately N2.75 trillion, or 3.2%, closing lower with a total market value of N83.337 trillion, down from N86.085 trillion as of October 31.

Dangote Cement was the biggest drag on the measure, falling 10%; MTN Nigeria Communications and Bua Cement suffered the same faith – falling by the same 10% on Tuesday.

Despite the severity of this correction, the index’s Year-to-Date (YtD) Return remained at a robust 37.31%, highlighting the massive bull run that preceded the sell-off.