The federal government plans to utilise unclaimed dividends and dormant account balances of up to six years, to mitigate Nigeria’s economic challenges.
The Fiscal Policy Reforms Committee has advised Nigerians with unclaimed dividends and dormant account balances to start the process of claiming them if they were not up to six years.
Bode Oyetunde, Senior Special Assistant to the President on Finance and Fiscal Matters and Secretary of the committee, gave the advice at the Finance Act 2020 Stakeholder Engagement webinar, held on Thursday, to share perspectives on the implications of the Finance Act 2020, for capital markets and the financial services sector.
The advise came following concerns raised by Nigerians on the provision, as decided by the government, to utilise unclaimed dividends and dormant account balances of up to six years, to mitigate Nigeria’s economic challenges caused by the COVID-19 pandemic.
The funds realised are to be put in a trust fund to be managed by the Debt Management Office (DMO), according to provisions of the Act.
“If you have bank balances and unclaimed dividends that are not six years and above, this has no implication on you.
“If you have unclaimed dividends in a company, that is not a public limited one listed on the Nigerian Stock Exchange, you have no issue. If you do, you can start the process of taking back your unclaimed dividends and if it is a bank balance, go and get your bank balances.
“All these will be done in consultation with the bankers’ committee, CBN and the banks for the unclaimed bank balances and unclaimed dividends, registrars, Securities and Exchange Commission, other regulatory bodies,” Mr Oyetunde said.
He assured that the process would be transparent, adding that the Federal Government had “Nigerians’ best interests at heart” in its efforts to deploy resources to deal with the challenges it faced.
“The government would make sure to observe and protect people’s constitutional rights, even though the management of the funds collected would remain the responsibility of the DMO,” he added.
Sovereign debt management
He said Sovereign Debt Management, would, however, never be ceded to the private sector emphasising that the laws of the country and the constitution allowed the President to appoint ministers for such sovereign matters.
“Sovereign Debt Management is the responsibility of the minister responsible for finance, and it is the responsibility of the government. There is nowhere in the world, I am aware of, where Sovereign Debt Management is ceded to the private sector.
“We have the DMO established by law, and it is supposed to be the minister responsible for finance that will handle his or her duties in the emergence of any debt, and in terms of management of the funds that will be operated by the DMO.
“And from my understanding from the DMO and the Minister for Finance, Budget and National Planning, if there will be involvement of private sector professionals to ensure the integrity, the financial soundness, the DMO has a whole framework to manage the liabilities with the private sector, professional advice, both local and foreign, to manage our sovereign debt.
“In terms of tenure, DMO will look at the nature of the securities to be issued, given that we do not know the people that own the shares and account balances fully, because they have not come forward to claim them. That is why we are doing this,” he said.
He said the monies claimed by the Federal Government would be used to support the budget deficit.
“We are using the money to support the budget deficit, in the budget, we have four items: The revenue, the expenditure, which you deduct from the revenue, most countries have debit financing, so it is more expenditure than revenue, so there is the deficit and finally how we will finance the deficit and some other items.
“So, this fund is going to support the deficit, how we fund the deficit financing and that is going to be everything in the budget.
“I am sure as things progress and our fiscal position improves so that we now have sufficient revenue sources, then it is possible for the Ministry of Finance to look at a framework, whereby we dedicate this money to this activity,” he said.
‘Dormant accounts being activated’
Also, Albert Folorunsho, Tax Expert and Member, Fiscal Policy Reforms Committee, assured that a number of dormant accounts were already being reactivated.
“Quite a number of dormant accounts are being reactivated as I speak, and the banks are already contacting the owners, for those who are still alive, and most are reactivating their accounts.
Mr Folorunsho expressed the belief that “at the end of the day, not much will be transferred to the Unclaimed Dividends Trust Fund”.