… As Debt Pressure Mounts
Fresh records from Nigeria’s Debt Management Office (DMO) have shown that the Federal Government has raised N100 billion through the Unclaimed Funds Trust Fund (UFTF), drawing on dormant bank balances and unclaimed dividends as part of its domestic borrowing programme.
The DMO, in its latest domestic debt stock report, listed an instrument known as “UFTF FGN Security” valued at N100 billion as of December 31, 2025. The amount represents about 0.12 per cent of the Federal Government’s total domestic debt stock of N80.49 trillion.
The disclosure has renewed debate over the country’s rising debt profile and the use of idle private funds to support government financing needs.
The legal basis for the arrangement comes from the Finance Act 2020, which created a framework allowing dormant account balances and unclaimed dividends to be transferred into a central trust fund, pending claims by rightful owners.
Under the structure, the funds may be invested in Federal Government securities, effectively converting them into part of the nation’s public debt.
The National Debt Management Framework 2023–2027 also states that the UFTF is managed by the DMO in collaboration with the Central Bank of Nigeria (CBN) and the SEC.
Analysts said the development reflects the growing search for alternative funding sources amid pressure on public revenues, weak oil receipts, and expanding fiscal deficits.
Some financial experts described the trend as evidence that stronger fiscal discipline is urgently needed across all tiers of government.
“In fact, there should be a state of emergency on borrowing by all levels of government,” one Lagos-based economist said. “Nigeria cannot continue to depend on debt while many productive sectors remain underdeveloped.”
The analyst added that the country’s vast natural resources, agricultural land, solid minerals, and industrial potential remain largely underutilised.
“Rather than borrowing from every possible source, Nigeria should be asking when it will become a lender to other nations,” he said.
DMO figures showed that conventional debt instruments continue to dominate government borrowings.
FGN Bonds accounted for N63.63 trillion, representing 79.06 per cent of domestic debt. Treasury Bills followed at N13.85 trillion or 17.21 per cent, while Promissory Notes stood at N1.54 trillion.
Sukuk bonds accounted for N1.19 trillion, while Savings Bonds and Green Bonds made up smaller portions of the debt stock.
Although the UFTF borrowing remains relatively small compared to total debt, market observers said its significance lies in the source of the funds.
“These are monies belonging to shareholders and bank customers, not ordinary market borrowings,” a capital market operator said. “That naturally raises concerns about confidence, transparency and the speed of refunds.”
As of 2024, unclaimed dividends in Nigeria were estimated at more than N215 billion, according to market data.
The Securities and Exchange Commission (SEC) recently issued a circular warning registrars and quoted companies against treating old dividends as “statute-barred” without considering the Finance Act 2020.
The Commission clarified that dividends of publicly listed companies which remain unclaimed for six years or more are expected to be transferred to the UFTF and held in trust until shareholders come forward.
It also stated that shareholders retain the right to claim dividends that had not become statute-barred before December 31, 2020, when the law came into effect.
Pending the full operationalisation of the trust fund, the SEC directed companies and registrars to continue honouring valid requests for unpaid dividends and to file periodic compliance reports.
Civil society groups and investor advocates have previously criticised the policy, arguing that while the government may have legal backing, reliance on dormant private funds underscores deeper structural weaknesses in public finance.
With Nigeria’s debt burden continuing to climb, economists said long-term solutions lie less in new borrowing channels and more in expanding production, exports, tax efficiency, and prudent spending.
SOURCE: tribuneonlineng.com
