Nigerian Stocks Tumble 5% as Tax Policy Uncertainty Spooks Investors

Nigerian stocks tumbled as foreign investors rushed to sell ahead of a new tax regime set to triple capital gains taxes.

The NGX All-Share Index fell 5% on Tuesday, the steepest decline since March 19, 2010.

The drop marked the seventh consecutive session of losses.

“It’s the whole capital-gains-tax issue, a bit more clarity is needed on it,” said Victor Aluyi, co-managing partner at Aztran Global Investments. The “market is somewhat nervous,” he said.

Nigeria last month announced that foreign investors will face a 30% capital gains tax on the sale of shares starting in January from 10% currently, unless the proceeds are reinvested in other listed or unlisted domestic equities.

The measure is part of fiscal changes aimed at boosting government revenue.

The largest companies on the NGX exchange led Tuesday’s market rout. Dangote Cement, MTN Nigeria and BUA Cement all fell 10%. The NGX is now the world’s worst-performing equity market month-to-date, with an 8% decline in November.

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