NIGERIAN stocks are currently down. The Nigerian equities or stock market shed N6.54 trillion in market capitalisation in November 2025, the biggest loss ever recorded since January 2013.

This was after closing October 2025 on a bullish note, gaining eight percent. In fact, the Nigerian Exchange Limited (NGX) saw its largest monthly loss in five years in November, with the NGX All Share Index (ASI), a critical market indicator, dropping by 6.9 percent to 143,520.53 points from 154,126.45 points in October 2025.

The major reason for the loss is the Nigerian government’s increase of the Capital Gains Tax (CGT) from 10 percent to 30 percent. The CGT occurs when an investor is taxed on the profit when they sell or dispose of their assets that have increased in value. For instance, if you buy stocks for N10 per share and it appreciates to N15 per share, the government will take 30 percent of your N5/share gain. Imagine if you have 1 million shares, the government will take 30 percent of your N5 million profit, which amounts to N1.5 million.

The tax implementation is expected to begin on January 1, 2026. The CGT will possibly be reduced to 25 percent in January, according to tax insiders. However, the lack of clarity around the tax is hurting the stock market, forcing investors to sell off their shares now and take whatever is left.

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Analysts have particularly raised concerns over the impact of the CGT on the Nigerian stock market, with several of them pointing at sell-offs, negative effect on portfolio investment and lack of competitiveness with Nigeria’s emerging markets peers.

Clarification

However, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has provided clarity on the matter already, saying that said 30 percent or 25 percent CGT would only be charged on sales of shares where the proceeds would be reinvested in fixed income securities or other non-equity assets. This means that if you sell your shares and then re-invest your profits in bonds or commercial papers or other investments that are not stocks, you will pay the CGT.

Mr Oyedele further explained that the majority of retail investors would not be affected, as the exemption threshold of N150 million annually put over 90 percent of retail investors outside the scope. This means that several investors doing stock transactions below N150 million would not be affected by the CGT.

Time to invest

In spite of the hullabaloo, there is something many Nigerians may be missing, which is the fact that now is the best time to invest in stocks. In finance, investors are advised to ‘buy the dip.’ This means you should buy stocks when the prices are down and then sell when they rise. The stocks are down now, and there is no better time to buy than now.

A corporate finance expert, Mr Andrew Loo, who majors in economics, fixed income and foreign exchange, defined buying the dip as “buying or adding to an existing long position of an asset during a period of downward price pressure, hopefully with the opportunity for the price to recover.”

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“Investors ‘buy the dip’ and increase their exposure to that asset when prices are depressed in anticipation of prices recovering and earning larger returns. Disciplined and prudent investors base their decision on when to buy the dip on careful research and analysis as the downside risk for buying the dip is quite high as the investor is increasing their overall position on that particular asset,” he wrote on Corporate Finance Institute (CFI).

Experts say though the Nigerian stock market is currently down, it will begin appreciating the moment the Oyedele-led committee provides more clarity to investors, especially foreigners who are currently confused about the whole situation.

“Once there is better clarity on the CGT, the market will rise again, and those who bought when prices were low would smile to the bank,” said a stock market analyst, Mr Odubola Oyekanmi.

“Already, the National Tax Policy Implementation Committee (NTPIC), Mr. Joseph Tegbe, has said they will consult widely before implementation. So, I think that they have taken note of the issues and will address them.”

Another financial expert said, “There is already some level of clarity in CGT,” she said, predicting that the stock market will begin picking up by the end of the year.” She added that “business performance shows that investors will begin positioning for dividends early next year, which will see the stock market rebound by the first quarter of 2026.”

She advised investors to take advantage of the bear market situation (low prices) to increase their opportunity of making real wealth when the market begins appreciation soon.

“We have seen this before several times. Many investors, who listened to us, bought stocks when the market was dull. Earlier this year, they began making millions and billions when the market entered the boom. It is like that every now and again.”