by Niyi Jacobs
Nigerian banks faced a brutal week as investors dumped their shares in response to the government’s surprise 70% windfall tax on forex gains. The Banking Index plummeted 2.9%, wiping out gains made earlier in the year.
The tax, which targets capital gains earned between 2023 and 2025, has sent shockwaves through the sector, with analysts warning of reduced dividends, lower valuations, and strained liquidity. Major banking stocks, including FUGAZ, suffered significant losses, with UBA experiencing the steepest decline at 7.9%.
Investors are increasingly nervous about the impact on banks’ financial health, with foreign investors reportedly getting cold feet. The sector’s woes are likely to continue as the tax takes hold, casting a shadow over Nigeria’s banking landscape.
