Nigerian Equities Market Experiences Historic Plunge Amid Tax Policy Uncertainty

The Nigerian equities market experienced a severe contraction in November 2025, marking a significant reversal in performance attributed primarily to investor apprehension over the forthcoming Capital Gains Tax (CGT) provisions within the Nigeria Tax Act of 2025. This legislation, scheduled for implementation on January 1, 2026, introduces a progressive tax structure that could see corporate rates reach up to 30 percent, replacing the previous 10 percent flat rate. The resulting uncertainty triggered widespread profit-taking across the Nigerian Exchange Limited (NGX).

The market capitalization on the NGX plummeted by N6.54 trillion across November 2025, concluding the month valued at N91.286 trillion. This monthly contraction of 6.69 percent represented the steepest loss recorded since January 2013, the period when the NGX first surpassed the N10 trillion valuation threshold. The impact was concentrated among market leaders, with ten prominent blue-chip entities collectively losing N4.95 trillion in market worth. These ten firms, including Nestle Nigeria Plc, Airtel Africa Plc, and Seplat Energy Plc, accounted for approximately 51.1 percent of the total market value at N46.66 trillion during the review period.

Individual stock performance reflected the broader trend, with Dangote Cement seeing its market value diminish by N2.12 trillion as its share price retreated 19 percent to close at N534.60 per share. Following this, MTN Nigeria Communications Plc recorded a depreciation of N1.04 trillion, with its stock closing at N470.60 per share after a 9.5 percent drop. Sectorally, the NGX Industrial Goods Index sustained the most significant decline, falling 13.80 percent Month-on-Month to settle at 5,133.60 basis points. The NGX Premium Index, which tracks large-cap stocks, also declined substantially by 10.44 percent, confirming the central role of blue-chip holdings in the selloff.

In response to the market turbulence, Finance Minister and Coordinating Minister of the Economy, Mr. Wale Edun, offered assurances that the Federal Government intends to revisit the CGT framework before the January 2026 effective date to achieve an outcome that is both fair and conducive to investors. Edun made these remarks during the listing ceremony for the MOFI Real Estate Investment Fund in Lagos, stating the government would analyze and discuss stakeholder concerns. Furthermore, officials clarified that reinvesting sale proceeds into fixed-income securities would incur a 25 percent tax, addressing initial concerns that the full 30 percent rate might apply universally.

This regulatory ambiguity has precipitated notable capital flight, with international investors closely monitoring the government’s final determination on the tax structure. The market had previously achieved substantial year-to-date growth, gaining N28.57 trillion, or 45.45 percent, from the end of 2024 to reach N91.286 trillion by November 28, 2025. However, the November downturn has tempered this optimism. The overall market sentiment remains fragile pending definitive policy clarity on the new tax regime, which President Bola Ahmed Tinubu signed into law on June 26, 2025, suggesting continued volatility until the structure is finalized.