Foreign investors emerged from a virtual investor call with Nigeria’s fiscal reform chair, Taiwo Oyedele, with more concerns than reassurance, a development that could rattle sentiment toward the country’s equity markets.
The event, hosted by Standard Chartered, was intended to shed light on Nigeria’s newly minted capital gains tax (CGT) regime. But feedback from participants suggests the exercise instead amplified doubts over the policy’s coherence, fairness, and long-term investor appeal.
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Several institutional investors who were on the call characterised Oyedele’s tone as unexpectedly ideological. One participant decried the framing: “He basically said the bottom 97 percent cannot pay tax, so the government should focus on the 3 percent to fund the state.” Some argued the remarks deviated from market givens, stressing that capital markets demand nuance and predictability.
Nigeria is tripling CGT for foreign equity investors, raising concerns that the move may trigger a sell-off in the West African nation’s stock market, which is up almost 50 percent this year.
Foreigners will face 30 percent CGT on the sale of Nigerian shares from January unless the proceeds are reinvested in other listed or unlisted domestic equities. While the prior tax regime taxed share gains at a flat 10 percent without loss offsets, Oyedele has defended the shift toward progressive taxation, aligning Nigeria with models in the U.K., U.S., South Africa, Ghana, and Brazil. But many investors remained unmoved, citing a disconnect between theory and investor sensitivity.
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One fund manager bluntly called the core argument “BS,” challenging the notion that foreign portfolio investors (FPIs) would internally pay equivalent taxes in their home jurisdictions. “Most institutional investors are zero-rated taxpayers in their home jurisdictions,” he said.
Compounding concerns, participants said access was restricted: questions had to be channeled through the moderator, Razia Khan of Standard Chartered, and many felt delicate topics like Nigeria’s competitive positioning were glossed over.
Adding to investor unease, the new regime appears to draw inconsistent lines. Oyedele reportedly assured that holders of Open Market Operations (OMO) instruments would not face additional taxes, and that fresh bond taxation rules would only take effect in 2025. By contrast, equity investors were offered no comparable clarity.
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“If they want to do CGT, then do it properly and uniformly… the way they’re going about it is absolutely mind-bendingly frustrating,” one fund manager remarked.
Investors concede that the intention to discourage speculative “hot money” inflows is not without merit. Nigeria’s equity market, after all, has seen domestic institutions underpin gains of 430 percent since December 2019 to September 2025. Some believe the CGT could filter in longer-term, more stable capital.
But for now, clarity and credibility are the missing ingredients. The failure to assuage investor concern raises the risk that Nigeria may cede ground in a competitive frontier-market race for capital at a time when Africa’s most populous nation is capital-starved.
