…Experts call for stronger data management, digital verification and operational reforms as unclaimed dividends surge
Nigeria’s unclaimed dividends crisis has deepened, with outstanding dividends estimated at approximately N215 billion as of March 2024, up from about N190 billion in 2023, raising fresh concerns over investor protection, market efficiency and the operational capacity of registrars.
The development has placed renewed attention on the role of registrars, who maintain shareholder records, process dividend payments and facilitate claims. Recent studies suggest that increasing registrar workload and administrative complexity may be contributing to the persistent rise in unclaimed dividends.
While the Securities and Exchange Commission (SEC) has intensified efforts to promote e-dividend registration, investor data regularisation and compliance with market procedures, publicly available information does not indicate the existence of specific penalty schedules targeting registrar backlogs related to unclaimed dividends.
Instead, the regulator’s approach has largely focused on improving operational efficiency, strengthening compliance standards and encouraging investors to update their records to facilitate seamless dividend payments.
A recent academic study found a positive and statistically significant relationship between registrars’ span of control and the growth of unclaimed dividends, suggesting that as registrars manage larger numbers of companies and shareholders, the risk of administrative delays and payment bottlenecks increases.
Reacting to The Ameh News’ inquiry on the implications of the growing backlog, economists, corporate governance experts, public relations professionals and market analysts expressed concern over the trend while calling for urgent reforms.
Unclaimed Dividends Reflect Deeper Market Inefficiencies — Economist
Economist Celestine Ukpong said the N215 billion backlog represents more than a record-keeping problem, describing it as a symptom of broader inefficiencies within Nigeria’s financial ecosystem.
According to him, dividends are a key incentive for investing in the capital market, and when investors experience delays or difficulties accessing their returns, confidence in the market is weakened.
“The continued rise in unclaimed dividends indicates that there are structural issues that require urgent attention. While investor negligence contributes to the problem, the operational capacity of registrars, data quality challenges and verification bottlenecks cannot be ignored,” Ukpong said.
He noted that billions of naira locked in unclaimed dividends represent idle financial resources that could otherwise stimulate household spending, investment and economic activity.
“The longer these funds remain unclaimed, the greater the opportunity cost for both investors and the economy,” he added.
Trust and Communication Deficit Must Be Addressed — Dr Akin Olaniyan
Dr Akin Olaniyan, veteran journalist, Lagos Business School lecturer and leadership coach, argued that the issue goes beyond administration and touches on investor trust and communication.
According to him, many retail investors remain unaware of procedures required to retrieve dividends or update their shareholder records.
“The capital market thrives on trust, transparency and accessibility. When investors repeatedly hear about billions of naira trapped in unclaimed dividends, questions naturally arise regarding efficiency and accountability within the system,” he said.
Olaniyan stressed that registrars, listed companies and regulators must improve public communication and investor education.
“There is a need for sustained awareness campaigns to help investors understand e-dividend registration, data updates and claims procedures. Technology should make these processes easier, not more complicated,” he added.
Reputation Risk for Market Institutions — Dr Ejike Nduilo
Public relations strategist and Founder of Henryjanleens, Dr Ejike Nduilo, said the growing backlog poses reputational risks for institutions within the capital market ecosystem.
According to him, perception often shapes investor behaviour as much as actual performance.
“When investors hear that over N215 billion remains unclaimed, many may interpret it as evidence of systemic inefficiency even when the underlying causes are complex and involve multiple stakeholders,” Nduilo said.
He urged market operators to proactively communicate ongoing reforms and demonstrate measurable progress.
“The issue is not only about recovering dividends. It is also about restoring confidence. Regulators, registrars and listed firms must consistently communicate what is being done to address the challenge and improve investor experience,” he noted.
Digital Transformation Is Critical — Peter Adebayo FCA
For chartered accountant and financial analyst Peter Adebayo FCA, technology-driven solutions remain the most sustainable pathway to reducing the backlog.
He said significant improvements have been achieved through e-dividend initiatives but noted that more work remains to be done.
“The future lies in end-to-end digital integration among registrars, banks, regulators and market operators. Real-time verification systems, automated data matching and stronger database management can substantially reduce the accumulation of unclaimed dividends,” Adebayo said.
He added that stronger compliance monitoring and operational performance benchmarks could help improve efficiency without necessarily resorting to punitive measures.
“The focus should be on prevention. Once investor records are accurate and systems are fully integrated, the volume of unclaimed dividends should decline significantly,” he explained.
SEC’s Compliance-Focused Approach
Industry stakeholders note that SEC Nigeria has concentrated largely on compliance measures, investor data regularisation, e-dividend enrollment and improved retrieval procedures rather than publicly documented sanctions specifically tied to registrar backlogs.
This contrasts with approaches in some international jurisdictions where regulators have imposed significant monetary penalties for record-keeping failures in separate regulatory contexts.
Market observers believe the Nigerian regulator’s current strategy reflects an effort to address root causes through operational reforms rather than punishment alone.
Road to Resolution
Experts agree that resolving the unclaimed dividends challenge will require coordinated action involving regulators, registrars, banks, listed companies and investors themselves.
Among the key recommendations are accelerated digital verification systems, stronger investor education, enhanced registrar capacity, improved shareholder databases and wider adoption of e-dividend mandates.
As Nigeria seeks to deepen financial inclusion and strengthen investor participation in its capital market, stakeholders say reducing the N215 billion backlog will be critical to boosting confidence and improving market efficiency.
For now, growing regulatory scrutiny and mounting stakeholder pressure suggest that registrars and other market operators will face increasing expectations to deliver faster, more transparent and more efficient dividend administration processes.
Nigeria’s unclaimed dividends have climbed to N215 billion, prompting renewed SEC scrutiny and calls from experts for stronger registrar capacity, digital verification and investor data reforms.
Nigeria’s unclaimed dividends reached N215 billion by March 2024. Experts urge SEC, registrars and market operators to improve compliance, digital systems and investor data management.
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