Tinubu Directs EFCC-Recovered Funds, Unclaimed Dividends to Fund Student Loans

Tinubu Directs Recovered Funds to NELFUND as Student Loan Scheme Expands

President Bola Tinubu has directed that eligible liquid funds recovered by the Economic and Financial Crimes Commission (EFCC), alongside unclaimed dividends held in designated trust funds, be channelled to the Nigerian Education Loan Fund (NELFUND) to strengthen the Federal Government’s student loan scheme.

The Minister of Education, Dr Tunji Alausa, disclosed the directive on Wednesday after the Federal Executive Council meeting in Abuja. He said the Federal Executive Council (FEC) also approved the transfer of unclaimed dividends from the Capital Market Trust Fund and the Dormant Account Trust Fund to NELFUND.

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EFCC Recoveries to Support NELFUND

Under the new arrangement, liquid funds recovered through EFCC operations will form part of NELFUND’s funding base.

However, the directive does not cover recovered assets that cannot immediately be converted into cash. Alausa clarified that funds currently subject to legal disputes will also remain outside the transfer process. Only unencumbered recovered funds are eligible for the proposed transfer.

The distinction is important because EFCC recoveries can include cash, properties and other assets subject to forfeiture proceedings. The government’s latest directive focuses on funds that can legally and immediately support the student loan programme.

Unclaimed Dividends Added to Funding Sources

The FEC also approved the use of unclaimed dividends held under the Capital Market Trust Fund and the Dormant Account Trust Fund to support NELFUND.

Unclaimed dividends represent declared returns that shareholders have not collected. They can accumulate because of outdated shareholder information, difficulties tracing beneficiaries and other administrative challenges.

BusinessDay reported that Nigeria’s unclaimed dividends stood at about N242 billion, citing figures from the Securities and Exchange Commission.

The latest policy therefore introduces another potential source of funding for the student loan system while addressing the management of financial assets that have remained unclaimed.

Government to Establish Legal Framework

The Federal Government will need to establish the appropriate legal and administrative framework before the funds can be transferred.

Alausa said the President directed the Ministers of Finance and Education, the Attorney-General of the Federation and the Debt Management Office to work together on the framework.

The Attorney-General is also expected to work with the EFCC to review the legal provisions governing recovered funds and determine how eligible monies can lawfully move into NELFUND.

This process is significant because the funds involved have different legal and ownership considerations. In particular, unclaimed dividends remain associated with their rightful beneficiaries, while recovered proceeds can be subject to court proceedings and forfeiture requirements.

NELFUND Funding Needs Increase

The decision comes as the Federal Government continues to expand access to its student loan programme.

NELFUND was established under the Student Loans (Access to Higher Education) (Repeal and Re-enactment) Act, 2024, which provides the institutional framework for financing eligible Nigerian students pursuing higher education.

The scheme has continued to grow, with reports indicating that more than 1.2 million students are currently beneficiaries.

The government therefore faces the challenge of maintaining sufficient funding as applications and obligations under the programme increase.

Implications for Households

The student loan programme is designed to reduce the immediate financial barrier to tertiary education for eligible students.

Additional funding could allow NELFUND to sustain existing beneficiaries and accommodate more students as demand for education financing grows.

For households, access to education loans can potentially reduce the need to meet tuition and upkeep costs entirely from current income. This could be particularly relevant for families facing broader cost-of-living pressures.

However, the sustainability of the programme will depend on how consistently the new funding sources generate usable resources and how effectively NELFUND manages its growing obligations.

Wider Financial Sector Implications

The decision also has implications for Nigeria’s financial system, particularly the management of unclaimed financial assets.

The inclusion of unclaimed dividends places renewed attention on the need to maintain accurate shareholder records and efficient processes for reconnecting investors with their assets.

For capital market participants, the development reinforces the importance of ensuring that investor information remains current and that shareholders can access declared dividends without prolonged delays.

At the same time, the government's decision to direct eligible funds towards education represents an attempt to deploy otherwise idle financial resources towards a defined public policy objective.

Implications for the Housing and Real Estate Sector

Although the directive primarily targets education financing, it could have indirect implications for Nigeria’s housing and real estate market.

Education financing can influence household cash flow, particularly for families supporting children through tertiary education. If student loans reduce the immediate burden of education expenses, some households could have greater flexibility to allocate income towards housing, rent and other essential costs.

The policy could also contribute to longer-term human capital development. A larger pool of educated workers can support productivity, income growth and demand across sectors, including housing.

However, these effects would emerge over time and depend on the scale and sustainability of NELFUND’s financing.

Outlook

President Tinubu’s directive creates additional potential funding channels for NELFUND by bringing eligible EFCC-recovered funds and specified unclaimed financial assets into the student loan programme.

The immediate priority will be establishing the legal framework required to transfer the funds while protecting assets subject to legal claims and the rights of legitimate beneficiaries.

For the education sector, the success of the policy will ultimately depend on whether the additional resources translate into reliable and sustainable student loan funding. For the wider economy, the initiative highlights the government’s broader effort to redirect available financial resources towards social investment and human capital development.

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