• Tuesday, October 03, 2023
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Cash-strapped Nigeria’s plan to tap N158bn unclaimed private dividends sparks outrage

IMG shareholders laud 40kobo dividend payment

The Nigerian government is proposing to take ownership of unclaimed dividends belonging to private persons as part of efforts to fill a gaping revenue hole opened up by lower oil prices and the COVID-19 pandemic, according to a provision in its Finance Bill for 2021 which it said was still subject to review.

The provision can be found in section 39 of the draft bill published by the finance ministry, Friday.

The total value of unclaimed dividend in the Nigerian capital market stood at N158.44 billion and over N100 billion of the amount are from unclaimed shares, according to data from the Securities and Exchange Commission.

The Federal government’s plan to grab unclaimed dividends is stirring concerns in the investor community over what appears to be a swoop on private resources.

One investor said it seems an “attempt by the government to reap were it did not sow” notwithstanding the tax already paid on it.

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An unclaimed dividend is recorded when a shareholder fails to claim an already paid dividend. Shareholders are required to claim dividend within 30 days of when the dividend are declared.

If dividends are unclaimed for 12 years, the money is returned to the paying company to redistribute to other shareholders. The proposed Bill however changes that.
Such dividends would now be required to be handed over to the government as a trustee in a perpetual fund created under supervision of the Central Bank of Nigeria and Debt Management Office. The private sector will be involved in the governance of the fund, according to the Bill.

Detailed analysis to follow….