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Borrowing from the dead

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The plan by the Federal Government to borrow what it branded as unclaimed dividends and dormant accounts are tantamount to borrowing from the dead because, to a large extent, the owners of the unclaimed funds are dead people.

Daily in Nigeria, people die from accidents, robberies, kidnapping, ritual killings, etc. The Boko Haram war alone has claimed thousands of lives. All of these unfortunate dead citizens have money in banks and dividends in insurance companies.

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Once they were dead, all the monies they left behind in financial institutions became literally dead as well. No doubt, it is these dead people’s money that was clarified as unclaimed dividends and dormant accounts.

There is no national database in Nigeria to document who is living or dead or vulnerable. Nigerians are merely in the catalogue of human existential reality. That is why funds could be classified as unclaimed and no effort is made to trace the owners or beneficiaries because there is no database.

Indication is that you, parent, grandparents, and family may have unclaimed dividends. As of January 2017, there is about N80 billion worth of funds in unclaimed dividends according to reports. This and more is what the Federal Government is targeting.

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There is no guarantee that this money will be re-paid once it is taken away because there is no party to sign as the lender or owner of the funds. No financial institution can lay claim to the funds.

According to reports, the Federal Government plans to borrow the unclaimed dividends and funds in dormant account balances of Deposit Money Banks sequel to Part XII of the Companies and Allied Matters Act in the recently signed Finance Act 2020.

Basing on the UK Unclaimed Shares and Dividends law, Part XII of the Act stated that dividends were special debts due to and recoverable by shareholders within 12 years, and actionable only when declared. The Act states that dividends that were unclaimed after 12 years should be included in the profits that should be distributed to the other shareholders of the company.

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It noted that notwithstanding subsections (1) and (2), dividends of a public limited liability company quoted on the Nigerian Stock Exchange which had remained unclaimed for a period of six years or more from the date of declaring the dividend shall be immediately transferred to the Unclaimed Funds Trust Fund.

“Such unclaimed dividends transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and shall be available for claim by the shareholder at any time, pursuant to the aforementioned perpetual trust,” the Act stated.

Other than the foregoing, the government has also mooted the idea of borrowing from the pension fund. This time around, it is the Nigeria Governors Forum (NGF) that reportedly endorsed two proposals to borrow a total of N17 trillion from two sources for infrastructural development.

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The governors reportedly took the decision after receiving a briefing from the Kaduna State Governor, Mallam Nasir el-Rufai, who is the Chairman of the National Economic Council Ad Hoc Committee on Leveraging Portion of Accumulated Pension Funds for Investment in the Nigeria Sovereign Investment Authority (NSIA). El-Rufai briefed the forum on a proposed National Infrastructure Investment Fund, saying a total sum of N2 trillion at nine per cent interest could be accessed through the NSIA.

This was contained in a communiqué of the 22nd teleconference meeting of the NGF, signed by its Chairman and Ekiti State Governor, Kayode Fayemi and made available to newsmen in Abuja.

Prior to that, the National Economic Council (NEC) had also expressed its intention to borrow N2 trillion from the growing funds under the Contributory Pension Scheme. The impression was given that the pension scheme is safe and cannot be touched by anybody.

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The National Pension Commission reportedly revealed that the total funds under the scheme stood at N11.34 trillion as of the end of August, out of which N7.5tn had been invested in Federal Government securities.

From the foregoing, it is obvious that government is hungry of the fund and is out to take advantage of any available funds anywhere in the system. Insane societies where the system works, this fund could be borrowed by the government for a special purpose but certainly repayable.

Unfortunately, the fund’s government is targeting belong to the dead and vulnerable people. While unclaimed dividends and dormant accounts largely belong to the dead, pension funds also largely belong to vulnerable workers, most of who are retirees that have no other source of income. Taking the pension fund in this system that has no probity and safety nets and doesn’t care for citizens is tantamount to suffocating retirees.

As a matter of fact, if anything has helped to worsen the mass poverty in Nigeria, it is the failure of governments at all levels to pay retirees’ pension and gratuity. Thousands of workers have retired and left to go home with no money to fall back on. The old and feeble men and women who have spent their youthful lives serving the system are not catered for in retirement.

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The pension funds that were deducted from their salaries over the years that were supposed to serve as anchor were stolen by unscrupulous and greedy government officials. The thieves go scot-free while the retirees are pauperised. Many die miserable death as a result of the wicked system.

It is not surprising that Nigerians are vehemently opposed to any move by the government to access these funds under the guise of borrowing. As at March 2017, Nigeria’s debt profile stood at NGN22.7 trillion. While the stock of external debt was USD22.07 billion, the domestic debt was USD52.

These were funds borrowed by the government from various domestic and external sources for different development purposes but with little or nothing to show. Without doubt, infrastructure accounts for the bulk of the reasons for borrowing those funds but the awful state of infrastructure in the country speaks volume about what happened to the funds.

The opposition to more borrowing by a cross-section of Nigerians – the Nigeria Labour Congress (NLC), SERAP and some other groups are justified.

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The Socio-Economic Rights and Accountability Project (SERAP) had sent an open letter to President Muhammadu Buhari, urging him to promptly drop the plan by the Federal Government to borrow about N895 billion of unclaimed dividends and funds in dormant accounts using the patently unconstitutional and illegal Finance Act, 2020 and to ensure full respect for Nigerians’ right to property.

SERAP’s letter dated January 9, 2021, and signed by its Deputy Director, Kolawole Oluwadare, said borrowing unclaimed dividends and funds in dormant accounts amount to an illegal expropriation and would hurt poor and vulnerable Nigerians who continue to suffer under reduced public services and ultimately lead to unsustainable levels of public debt.

The letter, copied to Attorney General of the Federation, Abubakar Malami, and Minister of Finance, Budget and National Planning, Zainab Ahmed, read in part: ‘’Rather than pushing to borrow unclaimed dividends and funds in dormant accounts, your government ought to move swiftly to cut the cost of governance, ensure review of jumbo salaries and allowances of all high-ranking political office holders, and address the systemic corruption in MDAs, as well as improve transparency and accountability in public spending.’’

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‘’The borrowing also seems to be discriminatory, as it excludes government’s owned official bank accounts and may exclude the bank accounts of high-ranking government officials and politicians, thereby violating the constitutional and international prohibition of discrimination against vulnerable groups, to allow everyone to fully enjoy their right to property and associated rights on equal terms.’’

‘’SERAP is concerned that the government has also repeatedly failed and/or refused to ensure transparency and accountability in the spending of recovered stolen assets, and the loans so far obtained, which according to the Debt Management Office, currently stands at $31.98 billion.’

Given the high level of poverty in Nigeria, the government should not do anything that would further drag Nigerians to suffering, misery, and penury. Nigeria’s poor rating in the 2020 Corruption Perception Index by Transparency International (TI) borders mainly on financial corruption, meaning that huge sums of money are being stolen in public places.

If there are probity and accountability in public finance, there would be no need for indiscriminate borrowing the way it is happening because there is more than enough money in Nigeria to cater for the nation and even lend to other countries.

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