In the last 11 years, I have personally gone lengths to ensure I maintain not more than two bank accounts at a time. This is not to say I don’t have other (read as 2 others) bank accounts that are not in use.
In deed, for any millennial or GenZ who has gone through the Nigerian university system or probably undergone the mandatory National Youth Service Scheme, it is near impossible that you were not made to open an account with a different financial institution due to location, convenience or by a request of the ‘paying authority.’ In my own case, my first employers made me open an account with the official bank of the school on the basis of institution policy.
Due to the fact that I have my preferred banks, I have since abandoned those accounts (with no remnant deposits in them) opened for ‘extra-curricular purposes.’ But this is not the case for many.
Where’s this leading to?
“Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account shall be transferred immediately to the trust fund.”
Following the signing into law of the Finance Act 2020 by President Muhammadu Buhari, on 31st December 2020, bank account balances unattended to, or those with unclaimed dividends for at least six years will now be available as special credit to the federal government through the Unclaimed Funds Trust Fund. This will also be a sub-fund of the Crisis Intervention Fund.
According to the act, monies transferred to the trust fund supervised by the Debt Management Office (DMO) will be a “special debt owed by the federal government to shareholders as well as dormant bank account holders” but that the original owners of the money can claim it at any time. A move that is believed will make needed funds available to the federal government without foreign exchange worries or conditions attached to loans from multilateral lenders.
While there have been huge concerns from Nigerians about the rising debt profile of the country, initiatives like this pass off in many quarters as ingenious and less-troubling. This is considering statistics from the Debt Management Office (DMO) which puts debt the country owes multilateral lenders such as the World Bank Group, International Monetary Fund (IMF) and African Development Bank (AfDB) Group at $31.98 billion; as of September 2020.
There are however, criticisms against this move especially from the Securities and Exchange Commission (SEC), shareholders, market operators, registrars and stakeholders in the sector. One of the major points raised is that government lacks powers to manage funds belonging to private sector investors. In the opinion of Independent Shareholders Association of Nigeria (ISAN), the idea of converting such private wealth to federal wealth negates the relevant provisions of the rights to own property as guaranteed by the 1999 constitution.
Before the President gave assent to the bill, there were also contentions that the take-over of unclaimed dividends estimated to be about N150 billion, by government is not necessary since market regulators, through various initiatives, were taking steps to ensure that unclaimed dividends were reduced to the barest minimum. For some other stakeholders, there are still scandals and massive stealing in government agencies set up to administer pension funds.
On the part of the SEC; being the capital market regulator and mandated by the Investment securities act to protect the interest of the investors, it should be the one to administer or to manage or to supervise the operation of that fund.
To whichever divide; having become law, it is hoped that this Unclaimed Funds Trust Fund will be administered properly through the culture of probity and accountability. This will help avoid a repeat of the Pension Administration scam and similar scandals that have done terrible damage in the country. We mustn’t as a people also run away from the fact that the cost of governance must mandatorily be reduced to free up resources for developmental purposes.
Temidayo Taiwo-Sidiq is a Political Journalist, Analyst and Social Change Advocate with major interest in Nigerian Politics, Governance and Sports.