Unclaimed Dividend Burden Persists as Investors Struggle to Access Funds Despite SEC Reforms

Efforts by the Securities and Exchange Commission (SEC) to tackle Nigeria’s longstanding unclaimed dividend problem are facing renewed scrutiny as investors continue to complain about difficulties recovering their money, even as the value of unclaimed dividends in the capital market has climbed to ₦215 billion.

The development raises questions about whether reforms introduced over the years have delivered meaningful relief to shareholders or merely shifted unclaimed funds from company balance sheets to a government-managed trust structure.

The challenge has remained a persistent concern despite initiatives introduced under former SEC Director-General, Lamido Yuguda, whose tenure ended in April 2024.

Yuguda sought to address the problem through the upgrading of the electronic dividend portal, the creation of an identity management committee, the harmonisation of investor databases and public awareness campaigns aimed at encouraging shareholders to mandate their accounts for electronic dividend payments.

Yet the overall stock of unclaimed dividends has continued to rise.

At the time Yuguda was removed from office, unclaimed dividends in the Nigerian capital market stood at about ₦190 billion. The most recent figure disclosed by SEC Director-General, Emomotimi Agama, puts the amount at ₦215 billion.

The increase suggests that while some operational improvements may have been made, the underlying challenge remains unresolved.

Banks Cut Unclaimed Dividend Liabilities, But Not Through Investor Claims

A review of audited financial statements of banks, cement companies and telecommunications firms shows that the picture is more complicated than it first appears.

At first glance, unclaimed dividend liabilities reported by several banks declined sharply in 2025.

Among banks that disclosed figures, total unclaimed dividends fell from about ₦77.63 billion in 2024 to ₦26.46 billion in 2025, representing a decline of almost 66 per cent.

United Bank for Africa reduced its unclaimed dividend balance from ₦45.99 billion to ₦20.94 billion, while Zenith Bank recorded an even steeper decline from ₦30.60 billion to ₦4.48 billion.

Ecobank’s balance fell from ₦18.16 billion to ₦14.50 billion, while First HoldCo’s dropped from ₦5.02 billion to ₦1.86 billion.

Access Holdings reported only a marginal reduction from ₦17.73 billion to ₦17.48 billion, while Stanbic IBTC’s balance remained broadly stable at about ₦1.04 billion.

However, the decline does not necessarily indicate that shareholders suddenly claimed tens of billions of naira in outstanding dividends.

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Instead, the reductions were largely driven by the SEC’s 2025 directive operationalising the Unclaimed Funds Trust Fund (UFTF) in line with the Finance Act 2020.

Under the directive, quoted companies are required to transfer dividends that have remained unclaimed for six years or more to the Debt Management Office through the UFTF.

For example, First HoldCo disclosed that it transferred ₦7.89 billion to the fund during the year, while Lafarge Africa transferred more than ₦1.09 billion.

The implication is that billions of naira disappeared from company balance sheets, not because shareholders collected them but because they were transferred to the trust fund.

The Finance Act provides the legal framework for this arrangement. Section 432 of the Companies and Allied Matters Act, as amended by the Finance Act 2020, states that dividends unclaimed for six years or more by shareholders of listed companies must be transferred to the UFTF.

The law further provides that such funds become a special debt owed by the Federal Government to shareholders and remain claimable at any time under a perpetual trust arrangement.

Shareholders Question Trust Fund Process as SEC Remains Silent

While regulators argue that the framework protects investors’ rights, shareholders say the process has created more confusion than clarity.

Abel Ezekiel, an investment and portfolio analyst, said many investors still encounter difficulties dealing with registrars despite completing all required documentation.

“Ordinarily, it’s supposed to be self-service and supposed to be a little bit of a benefit, but some registrars are too difficult,” he said.

According to him, investors often wait months after completing the required procedures.

“After you have done everything you need to do, you will finally see that you will still be having the matter hanging for close to three months, which is not supposed to be,” he said.

Ezekiel argued that instead of making life easier for investors, some registrars have made the process more cumbersome.

“Ordinarily, it’s supposed to be your benefit or make life easier, but some registrars are making it more difficult as it is,” he stated.

He also expressed concern about the process for reclaiming funds transferred under the trust fund arrangement.

“In clear terms, how people claim it from the end, I think that is another bigger thing,” he said.

Based on his experience, he believes some of the regulatory processes are becoming obstacles to investors.

“From my own angle, based on my experience and what I’ve seen, they are becoming an additional burden to investors in the system,” he said.

Citing the case of former Dangote Flour shareholders, he said, “For instance, look at the Dangote Flour money now. I don’t know anybody who has gotten that money. For now, that is just my own view.”

Similar concerns were raised by Patrick Ajudua, president of the New Dimension Shareholders Association, who argued that the SEC reforms have not achieved their intended objective.

“The reform in addressing unclaimed dividends is not yielding the expected results due to bureaucratic bottlenecks and an unclear chain of responsibility,” he said.

According to Ajudua, uncertainty over the roles of registrars and managers of the UFTF has complicated matters for investors.

“The bulk passing between registrars and those in charge of the Unclaimed Trust Fund has brought so much confusion rather than solving the problem,” he stated.

He said shareholders have yet to see evidence that the framework is delivering practical results.

“To my knowledge, I am yet to know any shareholder who has claimed their dividend from the Joint Managers of the Unclaimed Trust Fund,” he said.

Ajudua also questioned the structure created by the legislation.

“There has been an unclear role of responsibility since the coming on board of the Act on the Unclaimed Trust Fund,” he said.

According to him, shareholders continue to advocate amendments to the law because unclaimed dividends and dormant bank account balances are being treated under the same framework despite having different regulatory structures.

“Shareholders have called for an amendment of the Act as there should be a clear distinction between unclaimed dividends and dormant account balances,” he said.

“Both have no mutual regulatory supervisor, nor do they have a common reporting structure. Therefore, we await the National Assembly to do so in the amendment, which will also show a clear distinction of authority and responsibility,” he added.

Beyond banking, the challenge persists across other sectors.

The three major cement producers reported a combined ₦7.76 billion in unclaimed dividends in 2025.

Dangote Cement reduced its balance from ₦5.2 billion to ₦4 billion, but Lafarge Africa recorded an increase from ₦2.95 billion to ₦3.21 billion despite transferring more than ₦1 billion to the trust fund. BUA Cement reported ₦547.9 million in unclaimed dividends.

In telecommunications, MTN Nigeria recorded one of the sharpest increases. Its unclaimed dividend liability surged from ₦612.5 million in 2024 to ₦1.67 billion in 2025, representing a 173 per cent increase. The rise followed the company’s return to dividend payments after resuming profitability.

The figures suggest that new unclaimed dividends continue to accumulate even as older balances are being transferred into the government-managed trust fund.

Taken together, Pinnacle Daily’s analysis shows that the data point to a persistent structural problem. While regulatory intervention has reduced the amount of unclaimed dividends sitting on corporate balance sheets, the broader challenge of helping investors recover their money appears unresolved.

Efforts to obtain clarification from the SEC on measures being taken to ensure registrars process claims within reasonable timelines and to explain how investors can reclaim funds transferred to the UFTF were unsuccessful.

The commission’s Deputy Director and Head of External Relations, Efe Ebelo, did not respond to inquiries.

For many shareholders, that silence adds to existing uncertainty over a system that was designed to solve Nigeria’s unclaimed dividend problem but continues to face questions over accessibility, accountability and effectiveness.