The Nigerian Exchange (NGX) has extended its losing streak, wiping out more than ₦4.6 trillion in market value as investors—both institutional and foreign—continue large-scale sell-offs driven by heightened uncertainty in the macroeconomic and geopolitical environment.
Financial expert Nengi Phil-Ebosie (MBA, FCA), a seasoned professional in treasury, funds management, corporate finance, and risk management, has unpacked the factors fueling the negative market sentiment, stressing that the current downturn reflects fear-driven reactions rather than a deterioration in underlying fundamentals.
Speaking on the recent turbulence, Phil-Ebosie explained that equities markets are typically sensitive to new information, but Nigeria’s current situation has amplified this sensitivity. She identified two dominant forces behind the sell-off:
First is the geopolitical pressure created by the recent declaration by the President of the United States designating Nigeria as a “Country of Particular Concern” (CPC) over alleged severe violations of religious freedom. The announcement, accompanied by warnings of potential U.S. military action if the Nigerian government fails to curb ongoing attacks on Christian communities, sent shockwaves through foreign investment circles. Analysts say such notices raise red flags for portfolio managers globally, prompting immediate risk-adjusted repositioning and capital flight from markets perceived as unstable.
Second is the uncertainty surrounding the federal government’s new 30% Capital Gains Tax (CGT) on share disposal proceeds above ₦150 million and on chargeable gains exceeding ₦10 million within a 12-month period. Phil-Ebosie stressed that the absence of comprehensive guidance or clear implementation frameworks has further eroded investor confidence at a time the market requires reassurance, not ambiguity.
“Investors still do not have clarity regarding this tax policy change, and in financial markets, uncertainty is often as damaging as bad news,” she noted.
Despite the steep losses, Phil-Ebosie maintains that market fundamentals remain strong and that the current downturn is largely psychological, driven by fear, speculation, and external statements rather than domestic corporate performance.
She warned investors against emotional decision-making, describing panic selling as one of the most damaging missteps in volatile market cycles. Instead, she advised adopting a disciplined, long-term investment perspective.
“Market dips are not always a sign to run; they often present opportunities,” she said. “By buying into quality stocks during downturns, investors can lower their average cost and strategically position themselves for stronger returns when market sentiment improves.”
Market analysts agree that restoring stability will require clearer communication from policymakers, reassurance on geopolitical fronts, and strong signals from regulatory institutions to calm investor nerves.
For now, the NGX continues to operate under a cloud of uncertainty, but professionals like Phil-Ebosie insist that the present turbulence could prove temporary—especially if investors maintain discipline and resist the urge to react impulsively.
