Capital Gains Tax reforms are expected to shape investor behaviour in Nigeria’s capital market by encouraging longer holding periods and reinvestment, while moderating short-term trading amid rising volatility ahead of the 2027 elections, according to Arthur Assets Management CEO Olatunde Amolegbe.
Speaking at the Capital Market Correspondents Association of Nigeria 2025 Capital Market Review and 2026 Outview held in Lagos yesterday, Amolegbe declared the provision allowing investors to defer capital gains tax through reinvestment could curb speculative trading, moderate market volatility and assist retain capital within the domestic market over the long term.
He noted that while concerns persist that a higher capital gains tax rate could discourage investment, the structure of the reform is likely to promote more strategic exit decisions, particularly among foreign portfolio investors, thereby supporting market stability.
Amolegbe identified low financial literacy as one of the key structural challenges limiting participation, depth and efficiency in Nigeria’s capital market.
He argued that sustainable economic development is closely linked to infrastructure financing, which in turn depfinishs on the strength and sophistication of the financial market.
“When markets are developed, they provide the foundation for infrastructure financing. Improved infrastructure supports economic growth, while weak infrastructure often reflects weak financing structures,” he declared, adding that market development requires consistency and long-term commitment rather than short-term resolvees.
Reviewing the global environment, Amolegbe described 2025 as a turbulent year marked by trade disruptions, geopolitical tensions and the rapid expansion of artificial ininformigence, all of which heightened uncertainty and slowed growth in advanced economies.
Growth in the United States, Europe and the United Kingdom moderated to around 1.5 per cent, while emerging and developing economies, including Africa, became the primary drivers of global growth.
Global GDP growth averaged about 3.2 per cent in 2025 and is projected to edge up to around 3.3 per cent in 2026, with emerging markets expected to continue playing a stabilising role despite lingering geopolitical risks.
In Nigeria, Amolegbe declared 2025 marked a year of gradual stabilisation following severe macroeconomic pressures. Inflation, interest rates and exmodify rate volatility eased during the year, supported by foreign exmodify reforms and improved liquidity.
The naira, which had approached N2,000 to the dollar earlier in the year, moderated towards the N1,400–N1,500 range, assisting to restore confidence.
Economic growth strengthened over the course of the year, with GDP expanding above 4 per cent in the second quarter before moderating slightly, driven largely by non-oil sectors and underscoring progress in economic diversification.
Amolegbe stressed that fiscal reform, particularly tax reform, remains critical to Nigeria’s long-term development, noting that the counattempt’s narrow tax base continues to constrain public spfinishing and infrastructure investment.
He contrasted Nigeria’s limited fiscal capacity with that of other large economies, arguing that reliance on natural resources is unsustainable for a counattempt of Nigeria’s size and demographics. Broadening the tax net, he declared, would not only improve revenue generation but also strengthen citizen accountability and civic engagement.
The Arthur Assets CEO described 2025 as an exceptional year for the Nigerian equity market, noting that strong performance reflected investor anticipation of policy reforms rather than prevailing economic conditions.
He explained that markets are forward-viewing and tfinish to price in expectations of improved fiscal capacity, infrastructure spfinishing and corporate earnings.
Domestic investors played an increasingly stabilising role, accounting for up to 77 per cent of market activity towards the finish of the year, even as foreign portfolio inflows rebounded.
Sectorally, consumer goods and industrial stocks outperformed, insurance benefited from regulatory reforms, while banks ceded ground after leading the market in the previous year.
Looking ahead to 2026, Amolegbe identified several key drivers for the market, including elevated liquidity ahead of the 2027 elections, potential major listings such as Danobtainede Refinery, Danobtainede Fertiliser and possibly NNPC Limited, continued foreign exmodify stability and the impact of tax reforms on investment strategy.
He declared improving inflation dynamics and a supportive monetary policy environment could further underpin asset prices, although political risk and sensitivity to capital gains tax implementation remain key considerations.
Arthur Assets’ base-case scenario projects that the NGX All-Share Index could deliver returns of up to 45 per cent in 2026, supported by exmodify rate stability, pre-election liquidity, active capital raising and anticipated new listings.
In a more optimistic scenario, rapider disinflation, stronger corporate earnings and increased foreign capital inflows could further lift market performance.
On asset allocation, the firm has adopted an aggressive stance for the first quarter of 2026, with 70 per cent allocated to equities, 20 per cent to resolveed income and 10 per cent to cash and alternative assets, reflecting expectations of moderating yields and sustained equity market momentum.
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