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By Chinwendu Obienyi
Nigeria’s domestic debt profile has taken a controversial turn, with the Federal Government raising N100 billion through the Unclaimed Funds Trust Fund (UFTF), sparking concerns over governance, transparency, and investor confidence.
Latest data from the Debt Management Office (DMO) shows that the instrument, listed as “UFTF FGN Security,” stood at N100 billion as of December 31, 2025. Though it accounts for just 0.12 per cent of total domestic debt, its emergence signals a significant policy shift, the formal integration of unclaimed private funds into the government’s borrowing framework.
The DMO report puts total Federal Government domestic debt at N80.49 trillion, with traditional instruments still dominating. FGN Bonds accounted for N63.63 trillion, representing 79.06 per cent of the total, while treasury Bills stood at N13.85 trillion or 17.21 per cent, underscoring their continued importance in short-term liquidity management.
Other instruments contributed marginally. Promissory Notes were valued at N1.54 trillion (1.92 per cent), Sukuk bonds at N1.19 trillion (1.48 per cent), while Savings Bonds and Green Bonds accounted for just 0.13 per cent and 0.08 per cent respectively.
Against this backdrop, the N100 billion raised via the UFTF appears modest in scale but profound in implication. Unlike conventional borrowings, the funds originate from unclaimed dividends and dormant bank account balances, assets that legally belong to private individuals and entities.
Under the National Debt Management Framework 2023–2027, such funds are transferred into the UFTF after remaining unclaimed for a specified period. The pool is jointly managed by the DMO, Central Bank of Nigeria (CBN), and the Securities and Exchange Commission (SEC), and can be invested in Federal Government securities.
This mechanism effectively converts idle private funds into public debt instruments, explaining the appearance of “UFTF FGN Security” in official debt records. It marks a shift from passive custodianship to active fiscal deployment.
Regulatory guidelines issued by the CBN stipulate that these funds are warehoused in a dedicated trust pool, with beneficiaries retaining full rights to reclaim both principal and accrued returns upon verification. Banks are also mandated to publicly disclose dormant balances, a move aimed at improving transparency.
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However, the policy has triggered backlash from civil society groups and market stakeholders, who argue that the move blurs the line between private ownership and public finance.
Critics warn that, despite legal safeguards, deploying unclaimed funds as government debt could erode trust in the financial system, discourage savings, and create moral hazard risks if not transparently managed.
They also question whether the government should rely on such funds as a financing source, rather than addressing structural fiscal challenges through revenue reforms and expenditure discipline.
The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, strongly opposed the move, describing it as a violation of citizens’ financial rights.
Okezie argued that unclaimed funds, whether in the form of dormant bank balances or dividends, remain the property of individuals and should not be converted into government borrowing instruments under any circumstance.
“The policy could undermine public confidence in the banking system, as depositors may fear that their funds could be appropriated if accounts become inactive over time”, Okezie stated.
According to him, rather than deploying such funds, the government should focus on strengthening mechanisms to reunite rightful owners with their assets and improve financial literacy to reduce the volume of unclaimed balances.
While authorities maintain that the framework protects beneficiaries and optimises idle capital, the controversy underscores a deeper tension, balancing fiscal innovation with public trust.
As Nigeria navigates mounting debt pressures, the use of unclaimed funds may offer short-term relief, but its long-term implications for financial credibility and investor confidence remain a subject of intense debate.
