The Federal Government on Thursday challenged the authorities of the Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange, NSE, to find solutions to the alarming issue of huge unpaid dividends to capital market investors in the country.
The Minister of State for Finance, Yerima Ngama, who threw the challenge at the third Annual Retreat of the Capital Market Committee, CMC, which began in Abuja, said it was no longer desirable to have the over N60 billion unclaimed dividends unpaid to their owners, especially retail investors.
Though the capital market's performance remained impressive, with about 38.8 per cent growth in the current year, he said there was still the need to continue to explore other untapped investment opportunities for the market in order to create the short, medium and long-term investible funds necessary for ongoing infrastructure rehabilitation efforts of governments.
Mr. Ngama described the retreat as timely and crucial to efforts to attract more investments to the market, restore investors' confidence and create the institutional and regulatory instruments required to boost its growth. He said one of the challenges that must be tackled was to open up the market for new investors, particularly retail investors who are yet to really see it as a source of wealth creation.
Noting that the Nigerian capital market was ahead of most others in the world, posting good growth rates, the minister said this was as a result of over-reaction of the market to the activities of the 2008 global financial crisis.
He said most of the country's companies in the real sector were doing well but the dominance of foreign investors brought the market down. He pointed out that the regulators need to take steps to build confidence in investors to make the market stronger.
"Most of our companies in the real sector today are doing very well but we still have a lot of them that can be attracted to the capital market. This retreat is therefore a challenge to see that this is achieved. We should not just measure our performance based on the growth that we know will always happen, but based on how we broaden the market," he said.
He pointed out that this was necessary, considering that if one looked at how many big companies have been listed; one would find that the performance could improve significantly. He warned that operators should pay more attention to the development of untapped market and how many companies were out there performing well, but not yet listed.
The Chairman of the SEC Board, Suleiman Ndanusa, had traced the lingering crisis of unpaid dividends to year 2000 when the CMC, under the leadership of SEC, attempted without success to find lasting solution to the problem, which he said stood at about N8 billion then.
He said that despite the remarkable strides recorded so far in the efforts to attract more investments to the capital market, the issue of unclaimed dividends required a more concerted focus of the regulatory authorities in order to pull back the idle fund into the economy.
Mr. Ndanusa said that over the years, the level of unclaimed dividends had grown to between N40 and N60 billion, adding that it was still a challenge for CMC to resolve.