FG Borrows ₦100bn from Unclaimed Funds Trust Account in 2025
Unclaimed Dividends Converted to Public Debt as FG Borrows ₦100bn
Nigeria’s Federal Government raised ₦100 billion in 2025 through the Unclaimed Funds Trust Fund (UFTF), marking a notable shift in its domestic borrowing strategy. The development, disclosed in the latest domestic debt data from the Debt Management Office (DMO), reflects the integration of idle private funds such as unclaimed dividends and dormant bank balances into public debt instruments.
The amount, recorded as “UFTF FGN Security,” accounted for approximately 0.12 percent of Nigeria’s total domestic debt stock, which stood at ₦80.49 trillion as of December 31, 2025.
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How Unclaimed Funds Became Government Debt
The borrowing framework originates from the Finance Act 2020, which established the Unclaimed Funds Trust Fund as a central repository for dormant financial assets. Under the policy, unclaimed dividends of listed companies and balances in inactive bank accounts typically after several years of inactivity are transferred into the fund.
The National Debt Management Framework (2023–2027) provides further guidance, stating that these funds can be invested in Federal Government securities. Once deployed in this way, they are recognised as part of public debt, effectively converting private idle assets into government borrowing.
The UFTF is jointly managed by the DMO in collaboration with the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), ensuring regulatory oversight and coordination across the financial system.
Position Within Nigeria’s Debt Structure
Despite its policy significance, the ₦100 billion raised through the UFTF represents a relatively small portion of Nigeria’s overall domestic debt profile. Conventional instruments continue to dominate government borrowing.
According to DMO data, Federal Government bonds accounted for ₦63.63 trillion, representing over 79 percent of total domestic debt, while Treasury Bills stood at ₦13.85 trillion or about 17 percent. Other instruments, including promissory notes and Sukuk bonds, contributed marginal shares.
Within this context, the UFTF instrument is modest in scale but notable for its funding source and policy implications.
Legal Safeguards and Beneficiary Rights
Regulatory guidelines emphasise that the funds remain the property of their original owners. Beneficiaries retain the right to reclaim both principal and any accrued returns at any time, subject to verification processes.
The framework treats the funds as a “perpetual trust,” ensuring that individuals and shareholders can recover their assets even after they have been deployed in government securities.
Banks are also required to publicly disclose dormant balances, improving transparency and enabling potential claimants to identify and recover unclaimed assets.
Policy Debate and Investor Concerns
The use of unclaimed funds as a financing source has generated debate among market participants, civil society groups, and financial analysts. Critics argue that, despite legal backing, the policy raises concerns about governance, trust, and the boundary between private ownership and public finance.
Some stakeholders warn that reliance on dormant private funds could undermine confidence in the financial system, particularly if depositors perceive a risk of asset appropriation.
Others view the mechanism as a pragmatic approach to mobilising idle capital within the economy, particularly in the context of rising fiscal deficits and constrained revenue generation.
Implications for Fiscal Strategy
The development reflects broader fiscal pressures facing Nigeria, including persistent budget deficits and increasing reliance on domestic borrowing. As traditional revenue sources particularly oil remain volatile, the government continues to explore alternative financing channels.
While the UFTF provides an additional funding stream, analysts emphasise that long-term fiscal sustainability will depend on structural reforms, including improved revenue mobilisation, expenditure efficiency, and economic diversification.
Outlook
The Federal Government’s use of the Unclaimed Funds Trust Fund marks an evolution in Nigeria’s debt strategy, blending financial innovation with fiscal necessity. Although the scale of borrowing remains limited, its implications for policy credibility and investor confidence are significant.
For policymakers and investors, the key issue lies in execution and transparency ensuring that the framework protects beneficiaries’ rights while maintaining trust in the financial system. Over the long term, sustainable fiscal management will require reducing dependence on unconventional funding sources and strengthening core revenue streams.
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