Finance Act 2020: FG Can Now Borrow From Dormant Account Balances, Unclaimed Dividends

The federal government can now access unclaimed funds from dormant bank accounts as well as unclaimed dividends lodged in Nigerian banks.

This is based on the provisions of the Finance Act 2020 recently signed into law by President Muhammadu Buhari.

According to the act, such unclaimed funds can be accessed by the government as a sub-fund of the Crisis Intervention Fund however, owners of such funds can request them at any time.

Also, the report published by the Cable gave a condition that such unclaimed dividends must have been left unattended for at least six years before the government can access them.

“Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilized amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilized 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,” the act read.

The act however exempts official bank accounts owned by the federal government, state government or local governments or any of their ministries, departments or agencies.

The management and use of the trust fund will be supervised by the Debt Management Office (DMO) and governed by a governing council chaired by the finance minister and a co-chairperson from the private sector appointed by the president.

Other members of the governing council as provided for by the act shall include the governor of the Central Bank of Nigeria (CBN), director-general of the Securities and Exchange Commission (SEC), managing director of the National Deposit Insurance Corporation (NDIC), a representative of the registrars of companies, two representatives of the shareholders’ association, a representative of the Bankers’ Committee and the director-general of the Debt Management Office as the secretary of the trust fund.

Meanwhile, the inflation rate in Nigeria has climbed up to 14.89% according to the latest figures released in December 2020 by the National Bureau of Statistics (NBS).

This is a 0.66 percent increase from the 14.23 percent recorded in October 2020 as confirmed by the NBS.

According to the report, year on year, headline inflation is now 14.89% in November 2020 from 14.23% in October 2020. Food inflation at 18.30% in Nov 2020 from 17.38% in Oct 2020. Core Inflation at 11.05% in Oct 2020 from 11.14% in Sept 2020.