Investors Raise Concern Over Government Borrowing From Unclaimed Funds
Concerns Grow Over Use of Unclaimed Funds
STAKEHOLDERS in Nigeria’s capital market have warned that government borrowing from unclaimed dividends and dormant account balances could weaken investor confidence and discourage broader market participation.
The concern follows renewed attention on the use of funds held under the Unclaimed Funds Trust Fund, where idle private assets can be invested in government securities under existing legal provisions. Recent reports indicated that the Federal Government recorded borrowing linked to such funds.
Market operators say while the framework may provide short-term liquidity support for government financing needs, it could create uncertainty among retail investors and account holders.
Fear of Reduced Investor Confidence
According to analysts, confidence remains central to the growth of any capital market. Policies perceived to blur the line between private assets and public borrowing may discourage participation, especially among small investors.
They argue that many citizens may become reluctant to invest in shares or maintain dormant financial assets if they fear funds could be redirected into state borrowing instruments, even when legal safeguards exist.
Some stakeholders also warned that such perceptions could slow capital inflows into the market at a time Nigeria needs deeper domestic investment pools.
Need for Stronger Transparency
Experts say transparency and an efficient claims process are critical to maintaining trust.
Under current guidelines, rightful owners are expected to retain the ability to reclaim unclaimed funds, but operators insist public communication must be clearer and more consistent.
They also called for regular disclosures on the volume of funds borrowed, returns generated and timelines for reimbursement when beneficiaries make claims.
Balancing Funding Needs With Market Trust
While supporters of the framework argue that idle funds can be productively deployed rather than left unused, critics say investor trust should not be sacrificed for temporary fiscal relief.
Analysts note that long-term capital market growth depends on predictability, asset security and confidence in institutions.
They urged regulators and policymakers to strike a balance between innovative financing methods and protecting the credibility of Nigeria’s investment environment.
