At least 54 companies listed on the Nigerian Exchange (NGX) have not paid dividends to shareholders in the last five years, raising concerns over corporate governance and shareholder value. The “silent stocks” cut across key sectors, including agriculture, financial services, consumer goods, ICT, and industrials.
Dividend Silence Across the Market
According to recent market data, about 34 percent of all NGX-listed firms have withheld dividends since 2019. Some companies have remained silent for much longer:
Capital Oil last paid dividends in 2001
Rak Unity Petroleum in 2019
Others such as Unity Bank, African Alliance Insurance, Omatek Ventures, FTN Cocoa, and Chams Holding have also gone years without rewarding shareholders.
Records show that while three companies have failed to declare dividends for more than 21 years, others have been silent for 13–16 years.
Historic Trends
The problem, though persistent, has shown signs of improvement. In 2017, 84 companies had not paid dividends for over five years. By 2021, the number had dropped to 51, but the current figure of 54 highlights the market’s uneven progress.
Why Companies Stay Silent
Analysts say the absence of dividends does not always reflect weak performance. Some firms reinvest earnings into business expansion rather than distribute them. However, many companies face serious challenges, including:
Foreign exchange losses
Negative retained earnings
Eroded shareholder equity
These financial strains make dividend payouts unsustainable for many firms, especially multinationals grappling with Nigeria’s volatile macroeconomic environment.
A Brighter Side for Investors
Despite the silence from some companies, 2024 marked a rebound for dividend payouts on the NGX. Listed firms declared ₦1.1 trillion in dividends, with ₦1 trillion already paid out, a sign of renewed investor confidence.
The Securities and Exchange Commission (SEC) also reinforced dividend rules, mandating that unclaimed dividends older than six years be transferred to the Unclaimed Funds Trust Fund, though shareholders retain the right to claim dividends up to 12 years old.
Meanwhile, the NGX All-Share Index rose 37% in 2024, despite persistent headwinds of inflation, foreign exchange volatility, and high operating costs.
Summary: While over 50 companies remain “silent” on dividends some for more than two decades others are boosting payouts, helping restore investor faith in the Nigerian stock market.
