Onome Amuge
The Securities and Exchange Commission (SEC) said it is taking a proactive approach to reducing the significant level of unclaimed dividends in the Nigerian capital market. The amount of unclaimed dividends has reached N190 billion as of August 2023, which is considered a significant loss for investors and a barrier to attracting new investment.
The latest statistics, released in August 2023, show an increase of 7.35 percent from the N177 billion recorded in 2021, signalling the need for immediate action.
To this end, the SEC recently organised a three-day investors’ clinic in Yobe State in partnership with the Gombe State Investment & Property Development Company to proffer solutions to investors with unclaimed dividends and address complaints from investors in the region.
After three days of listening to and addressing the concerns of investors in Yobe State, Nigeria’s apex capital market regulator, shed light on the challenges facing the country’s capital market,including the problem of unclaimed dividends.
Danladi Mohammed, head of the SEC zonal Office in Kano, stated that the three-day exercise was designed to educate and create awareness about e-dividend, dematerialisation of share certificates, and the direct cash settlement payment system. The SEC also took this opportunity to address inquiries and complaints from shareholders in Yobe State and the surrounding areas.
Mohammed highlighted the importance of these initiatives, which are aimed at increasing transparency and efficiency in the capital market, and improving investor confidence.
“The initiative is one in a series of programmes and strategies towards reducing the level of unclaimed dividends, which stood at N190 billion in August 2023, by creating awareness, particularly in the regions, to make the investing public come forward to take what rightfully belongs to them.
“This is one of the key objectives of the Capital Market Development Master Plan 2015–2025,” he stated.
In addition to addressing the specific concerns of investors in Yobe State, Mohammed noted that the overall mission of the SEC is to ensure that the Nigerian capital market is on par with global standards in terms of regulation and development.
“The commission will embark on a series of investor clinics in 2024 in all the regions of the federation to provide the platforms for investors to reap the benefits of investing in the capital market,” he added.
According to the SEC, the three-day event was successful in addressing the numerous complaints and inquiries from investors who attended the clinic. These issues included the adoption of e-dividend, changes and reconciliation of names, share certificate verification, transmission of shares, payment of outstanding dividends, and many others.
The commission noted that the event provided an excellent opportunity for investors to directly engage with SEC representatives and receive the necessary assistance and guidance on various issues. This interaction, the commission added, will help to foster greater trust and confidence in the capital market among investors.
The issue of unclaimed dividends has been a persistent problem for the Nigerian capital market, according to Lamido Yuguda, the director general of the Securities and Exchange Commission. During the second post-Capital Market Committee (CMC) media briefing, held in August 2023, Yuguda acknowledged that the problem of unclaimed dividends is worsening. He explained that the SEC has been facing challenges related to identity management, multiple subscriptions, and legacy issues, which have contributed to the rise in unclaimed dividends.
According to capital market experts, there are several reasons why unclaimed dividends have been on the rise. One reason is that investors may have changed their residential address without updating their records with the registrar or investment company. Another reason may be that investors have not been keeping track of their personal investments or investments owned by deceased relatives.
To address the problem of unclaimed dividends, the SEC has introduced an electronic dividend (E-dividend) portal, according to Yuguda. The E-dividend portal is designed to improve the process of claiming dividends and to make it more user-friendly for investors. In addition to the E-dividend portal, the SEC said it is working with the Committee on Capital Market E-dividend Mandate, the Institute of Capital Market Registrars (ICMR), and the Nigeria Inter-Bank Settlement System (NIBSS) to improve the process of uploading required details and resolving issues related to unclaimed dividends.
In the face of challenging economic conditions, the Capital Market Committee remains optimistic that ongoing reforms will rejuvenate the nation’s economy, Yuguda stated. He acknowledged that constrained consumer spending and rising operational costs have created challenges for the capital market, but expressed confidence that these challenges can be overcome through ongoing reforms.
