Unclaimed Dividends Soar to ₦30 Billion Across Five Firms, Raising Investor Concerns
Despite regulatory efforts to curb the rise in unclaimed dividends, five major listed companies have accumulated a staggering ₦30 billion in unpaid shareholder earnings as of December 31, 2024. This persistent issue has sparked fresh concerns about the efficiency of the Securities and Exchange Commission’s (SEC) initiatives and the responsiveness of companies in addressing shareholder entitlements.
Breakdown of Unclaimed Dividends by Company
According to recent data:
• Dangote Cement Plc: ₦5.2 billion (up from ₦4.4 billion in 2022 and ₦4.7 billion in 2023).
• Lafarge Africa Plc: ₦2.95 billion (a sharp increase from ₦2.07 billion in 2023).
• Nigerian Breweries Plc: ₦7.1 billion (up from ₦5.5 billion in 2023).
• UAC of Nigeria Plc (UACN): ₦5.4 billion (up from ₦4.95 billion).
• Nestlé Nigeria Plc: ₦8.9 billion (a slight decline from ₦9.5 billion in 2023).
Despite Nestlé Nigeria’s marginal reduction, the overall upward trend in unclaimed dividends remains a major concern for investors and market regulators.
Regulatory Efforts and Persisting Challenges
The SEC has implemented multiple initiatives to address the issue, including:
• E-dividend mandate: Ensuring dividends are paid directly into shareholders’ bank accounts.
• Investor education and KYC compliance: Raising awareness to help shareholders claim their funds.
• A new digital application: Allowing investors to access and track their dividends in real time.
However, these efforts have yet to significantly reduce the backlog. Many shareholders, particularly retail investors, remain unaware of their unclaimed funds. Furthermore, heirs of deceased investors face bureaucratic hurdles when attempting to claim inherited dividends.
Market Impact and Investor Confidence
The growing volume of unclaimed dividends has raised concerns about corporate governance and shareholder engagement. Market analysts warn that the trend could erode investor confidence, making Nigeria’s capital market less attractive to both local and foreign investors.
“A market where investors routinely miss out on their entitlements is seen as inefficient, which could discourage participation and capital inflows,” said a market operator.
A Growing Crisis Over the Years
Unclaimed dividends have been a longstanding issue in Nigeria’s stock market:
• 1999: ₦2 billion
• 2011: ₦41 billion
• 2014: ₦80 billion
• 2020: ₦168 billion
• 2023: ₦190 billion
• March 2024: ₦215 billion
These rising figures suggest that existing solutions are insufficient, and more aggressive reforms are needed.
Calls for Legislative and Corporate Action
Market stakeholders believe that beyond SEC policies, listed companies and lawmakers must take further steps. Patrick Ajudua, President of the New Dimension Shareholders Association of Nigeria, called for:
• A legislative framework to address poor identity management and regulatory inefficiencies.
• Better technology integration to streamline dividend payments.
• Stronger shareholder engagement strategies to reduce the backlog.
While the SEC has proposed a trust fund for managing unclaimed dividends, the effectiveness of such a system remains to be seen. As investors and regulators continue to seek solutions, the question remains: Will Nigeria’s capital market finally resolve its unclaimed dividend crisis, or will shareholders continue to lose out on their entitlements?
Despite regulatory efforts to curb the rise in unclaimed dividends, five major listed companies have accumulated a staggering ₦30 billion in unpaid shareholder earnings as of December 31, 2024. This persistent issue has sparked fresh concerns about the efficiency of the Securities and Exchange Commission’s (SEC) initiatives and the responsiveness of companies in addressing shareholder entitlements.
Breakdown of Unclaimed Dividends by Company
According to recent data:
• Dangote Cement Plc: ₦5.2 billion (up from ₦4.4 billion in 2022 and ₦4.7 billion in 2023).
• Lafarge Africa Plc: ₦2.95 billion (a sharp increase from ₦2.07 billion in 2023).
• Nigerian Breweries Plc: ₦7.1 billion (up from ₦5.5 billion in 2023).
• UAC of Nigeria Plc (UACN): ₦5.4 billion (up from ₦4.95 billion).
• Nestlé Nigeria Plc: ₦8.9 billion (a slight decline from ₦9.5 billion in 2023).
Despite Nestlé Nigeria’s marginal reduction, the overall upward trend in unclaimed dividends remains a major concern for investors and market regulators.
Regulatory Efforts and Persisting Challenges
The SEC has implemented multiple initiatives to address the issue, including:
• E-dividend mandate: Ensuring dividends are paid directly into shareholders’ bank accounts.
• Investor education and KYC compliance: Raising awareness to help shareholders claim their funds.
• A new digital application: Allowing investors to access and track their dividends in real time.
However, these efforts have yet to significantly reduce the backlog. Many shareholders, particularly retail investors, remain unaware of their unclaimed funds. Furthermore, heirs of deceased investors face bureaucratic hurdles when attempting to claim inherited dividends.
Market Impact and Investor Confidence
The growing volume of unclaimed dividends has raised concerns about corporate governance and shareholder engagement. Market analysts warn that the trend could erode investor confidence, making Nigeria’s capital market less attractive to both local and foreign investors.
“A market where investors routinely miss out on their entitlements is seen as inefficient, which could discourage participation and capital inflows,” said a market operator.
A Growing Crisis Over the Years
Unclaimed dividends have been a longstanding issue in Nigeria’s stock market:
• 1999: ₦2 billion
• 2011: ₦41 billion
• 2014: ₦80 billion
• 2020: ₦168 billion
• 2023: ₦190 billion
• March 2024: ₦215 billion
These rising figures suggest that existing solutions are insufficient, and more aggressive reforms are needed.
Calls for Legislative and Corporate Action
Market stakeholders believe that beyond SEC policies, listed companies and lawmakers must take further steps. Patrick Ajudua, President of the New Dimension Shareholders Association of Nigeria, called for:
• A legislative framework to address poor identity management and regulatory inefficiencies.
• Better technology integration to streamline dividend payments.
• Stronger shareholder engagement strategies to reduce the backlog.
While the SEC has proposed a trust fund for managing unclaimed dividends, the effectiveness of such a system remains to be seen. As investors and regulators continue to seek solutions, the question remains: Will Nigeria’s capital market finally resolve its unclaimed dividend crisis, or will shareholders continue to lose out on their entitlements?