Unclaimed Dividends Law Threatens Investors Confidence, Financial Inclusion
The National Assembly (NASS) legislation mandating the transfer of an estimated N190 billion in unclaimed dividends to the Central Bank of Nigeria (CBN) has sparked reactions across the financial markets.
Analysts are expressing concerns over the negative effects of the bill on investors’ confidence, market governance and financial inclusion.
While positioned as a fiscal management initiative, this action is being criticised for its lack of transparency and for undermining investor confidence and the long-term growth of the capital market.
Unclaimed dividends—earnings distributed by publicly listed companies to shareholders—have accumulated over the past two decades.
Analysts highlighted that the huge amount is accumulation of unclaimed dividends over the years, and it stems largely from outdated shareholder records, lost share certificates, unlinked Central Securities Clearing System (CSCS) accounts, and the absence of next-of-kin notifications following shareholder deaths.
These funds, currently held by various registrars, rightfully belong to investors—many of whom are either unaware of their entitlements or face cumbersome procedures in accessing them.
Rather than tackling these root issues, NASS’s directive to transfer the funds to the CBN introduces new concerns.
It directly contradicts recent pronouncements by the Director General of the Securities and Exchange Commission (SEC), who directed registrars to release statute-barred dividends—those unpaid for over 12 years—to their rightful owners.
Ominously, the new legislation fails to establish a clear, transparent framework for how shareholders can reclaim their funds from the CBN. This lack of clarity breeds ambiguity and deepens mistrust among investors.
Moreover, reallocating private investment earnings to a government institution—without prior consent or sufficient safeguards—sets a troubling precedent.
This approach risks discouraging both local and foreign investors from engaging with Nigeria’s capital market at a time when investor trust is crucial.
While the government continues to champion financial inclusion and wider capital market participation, this legislation sends the opposite signal. It deters retail investors and threatens ongoing efforts to build an inclusive, investor-friendly financial system.
Capital market stakeholders have rightly stressed that the solution lies in regulatory reform and digital modernisation—not appropriation.
Instead of transferring these funds, the National Assembly should consider establishing centralised and accessible e-dividend database. The lawmaker should also consider taking steps to boost Investor awareness campaigns to inform shareholders of their entitlements
The authority can enhance market sentiment by considering the establishment of an independent, stakeholder-governed Unclaimed Dividend Trust Fund. NASS could also set up a streamlined, digitised claims process through inter-agency collaboration.
The directive also clashes with the broader economic reform agenda of President Bola Ahmed Tinubu, which aims to enhance Nigeria’s investment climate and attract sustainable capital.
Experts are now calling on the National Assembly to revisit the bill and align it with global best practices that uphold investor rights, strengthen market transparency, and promote long-term economic confidence.
The sanctity of investor funds must be preserved. Nigeria’s path to sustainable economic growth depends on fostering—not eroding—trust in its financial institutions. #Unclaimed Dividends Law Threatens Investors Confidence, Financial Inclusion#
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