The Nigerian government has decided to triple the capital gains tax (CGT) applied to foreign investors in local equities, raising it from 10% to 30% starting in January. The measure, part of a new tax law, will not apply to investors who reinvest their proceeds in other Nigerian securities, whether listed or unlisted.
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The decision has sparked growing concern in Nigeria’s stock market, which has already gained nearly 40% since the beginning of the year. Some analysts fear that investors may rush to take profits before the new tax takes effect, potentially triggering a sell-off toward the end of the year.
This reform is part of a broader economic restructuring program launched by President Bola Tinubu since taking office in 2023. His policies — including the gradual removal of fuel subsidies, the liberalization of the naira, and a return to orthodox monetary management — have helped restore investor confidence and fueled a strong rally in Nigerian assets.
Foreign investors currently account for about 21% of total transactions on the Nigerian Exchange, representing 1.45 trillion naira (nearly $1 billion) in trades over the first eight months of the year. That share could decline if the new tax regime makes Nigerian investments less attractive.
