For most investors in the stock market, the goal is to benefit from capital appreciation, dividend payment or ideally, both. While these gains are not always guaranteed, stock markets worldwide have historically delivered significant returns, making equities a powerful vehicle for long-term wealth creation. In Nigeria, however, a persistent issue continues to undermine investor confidence; unclaimed dividends.

A Growing Concern in Nigeria’s Stock Market

Despite the Nigerian Exchange (NGX) being one of the continent’s most promising markets, the growing volume of unclaimed dividends has become a recurring problem. Systemic inefficiencies and regulatory bottlenecks have led to a steady rise in the amount of unpaid dividends year after year.

In June 2025, the Securities and Exchange Commission (SEC) reiterated provisions from the Finance Act 2020, stating that dividends unclaimed for six years or more must be transferred to the Unclaimed Funds Trust Fund, where they will be held in trust pending any legitimate claim by shareholders.

Furthermore, dividends not yet statute-barred (i.e., not older than 12 years before December 31, 2020) are still eligible for claims under this provision. But accessing them remains a significant hurdle for many investors.

Why Do Dividends Go Unclaimed?

Unclaimed dividends often result from a combination of the following:

Death of shareholders without a designated next of kin.
Identity verification challenges and inconsistencies in investor records.
Delays by registrars in processing e-dividend mandates.
Multiple or duplicate shareholder accounts, often under pseudonyms or nominee names.
Poor communication between registrars, companies, and shareholders.
Lack of awareness among investors about how to claim dividends.

The Role of Registrars and How They Often Fail Investors

Registrars play a critical role in managing shareholder records, organizing company meetings, and most importantly disbursing dividends. When a listed company declares dividends, registrars are tasked with ensuring prompt payments to all entitled shareholders.

However, in many cases, shareholders wait for years without receiving their dividends. Often, this is not due to investor error, but the inefficiency or outright negligence of the registrars themselves.

By law, companies are required to pay interest on unpaid dividends after three months, if the delay is their fault. But many shareholders are unaware of this right, and even when they are, there is no efficient redress mechanism for enforcing it.

Worse still, some registrars deliberately delay or withhold dividend payments, citing identity verification issues, even in today’s tech-driven age with biometric verification and digital ID systems readily available.

Frustration Despite Efforts to Comply

Some shareholders report visiting registrars’ offices multiple times, submitting e-dividend forms repeatedly, and yet still being denied access to their funds. These delays directly contradict the financial principle of time value of money, and in the capital markets, time lost is value lost.

There is an urgent need to automate and modernize registrar systems. Dividend payments should be seamlessly integrated with stockbroking accounts and bank mandates to eliminate manual bottlenecks and administrative lapses.

Weak Enforcement Worsens the Problem

While the SEC has consistently raised concerns over the unclaimed dividends crisis, its response has been largely passive. The regulator’s current focus on curbing Ponzi schemes and illegal investments is commendable, but the core of the capital market must not be neglected.

What’s needed is a robust investor redress system, one that sets clear timelines, applies sanctions on erring registrars, and runs awareness campaigns to educate investors about their rights.

The SEC must establish a dedicated complaints desk and a fully functional online portal for resolving dividend-related issues swiftly. Currently, many complaints lodged through the SEC website or even submitted physically go unresolved for months, if not indefinitely. This lack of responsiveness is unacceptable in a modern financial system.

A Market That Works for Everyone

Many Nigerian investors have abandoned their dividends out of sheer frustration, leading to a loss of trust in the market. For a country already grappling with widening inequality, this issue reflects deeper structural problems in how wealth is distributed and managed. A more efficient and inclusive capital market could play a vital role in achieving that goal.

The Way Forward

To rebuild trust and unlock the true potential of Nigeria’s capital market:

Registrars must be held accountable and required to adopt digital solutions.
The SEC should enforce minimum service standards and resolve complaints within defined timeframes.
A centralized, automated dividend payment system must be introduced.
Investor education campaigns should be rolled out via digital and traditional channels.

Ultimately, if retail investors are consistently denied access to the returns on their investments, there’s little incentive for them to remain in the formal market. This may opens the door to informal schemes and other high-risk ventures. For Nigeria to foster a resilient financial system and sustainable wealth creation, the capital market must be transparent, efficient, and fair, starting with solving the problem of unclaimed dividends.

To learn more about dividend payment companies:

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