Why nearly half of Nigeria’s listed companies paid no dividends in three years

Nearly half of Nigeria’s listed companies failed to pay dividends for three consecutive years, according to a recent investigation by Premium Times. The report identified at least 60 of approximately 136 publicly traded firms on the Nigerian Exchange (NGX) that have not distributed dividends since 2021. This figure represents an increase from the 51 companies noted in the five-year period leading up to 2021, when there were 156 quoted stocks, including exchange-traded funds (ETFs). The analysis revealed that many Nigerian-listed companies refrain from offering dividends due to a mix of strategic, regulatory, and policy-driven decisions. Some businesses opted against regular dividend payouts to reinvest profits into growth initiatives, while others faced challenges such as negative retained earnings, which hinder their ability to distribute returns. Notably, no legal requirement compels Nigerian corporations to pay dividends to shareholders, meaning non-payment does not constitute a regulatory violation unless explicitly outlined in corporate governance frameworks. Several prominent firms were highlighted in the report for their lack of dividend distributions. These include Austin Laz, Cadbury, Caverton, Chams, Chellarams, Daar Communications, Dangote Sugar, Critical Minerals Financing Corporation, Ellah Lakes, Nigerian Enamelware, Eterna, ETranzact, Eunisell, Fortis Global, FTN Cocoa, Golden Guinea Breweries, Unity Bank, Guinness, International Breweries, Japaul Gold, Juli, Livestock Feeds, Mutual Benefits, Morison Industries, Multi-Trex, Nigerian Breweries, NCR Nigeria, Neimeth, Nestle, NSL Tech, Oando, Omatek, Premier Paints, PZ Cussons, Royal Exchange, RT Briscoe, SCOA, Tantalisers, Thomas Wyatt, Union Dicon, Universal Insurance, UPDC, Veritas Kapital, Coronation Insurance, African Alliance, Afromedia, Ekocorp, Pharma Deko, and STACO Insurance. Many of these companies have not released audited financial statements since 2022, further delaying any potential dividend announcements. Other firms, such as Briclinks Africa, Champion Breweries, Honeywell Flour, Ronchess Global Resources, and John Holt, are adopting a long-term strategy, choosing instead to retain earnings for operational expansion. Underwriters like Lasaco Assurance, Prestige Assurance, Regency Alliance, and Sovereign Trust Insurance also fall into this category, emphasizing reinvestment over immediate shareholder returns. The report also noted that some newly listed companies, including Aradel Holdings, Transcorp Power, Haldane McCall, VFD Group, Mecure Industries, Legend Internet, and Zichis Agro Allied Industries, were excluded from the analysis due to their relatively recent public company status, having achieved this status from 2023 onward. As a result, they are not yet eligible for evaluation based on historical dividend performance. Additionally, the list does not account for ETFs or newer listings that may not have met the three-year threshold for dividend distribution. Loss-making stands out as one of the primary obstacles preventing Nigerian public companies from distributing dividends. Corporate filings indicate that only nine of the companies under review reported profits during the entire five-year period from 2021 to 2025. These included Bricklinks Africa, Champion Breweries, Honeywell Flour Mills, John Holt, Lasaco Assurance, Prestige Assurance, Regency Alliance, Ronchess Global Resources, and Sovereign Trust Insurance. This number remained largely unchanged compared to the prior five-year period ending in 2021, when only five companies were similarly classified. Under Nigerian corporate law, public firms are prohibited from declaring dividends if they are operating at a loss. The rationale behind this restriction is that such companies must prioritize financial recovery over shareholder rewards, directing available capital toward restoring operational viability before considering dividend distributions. This legal framework underscores the complex interplay between corporate strategy, regulatory compliance, and investor expectations in the Nigerian stock market.