President Bola Tinubu’s directive to redirect unclaimed dividends that are presently housed within the Unclaimed Funds Trust Fund (UFTF) to shore up the Nigerian Education Loan Fund (NELFUND) may win political points for expanding access to tertiary education. However, it strikes a discordant note in the unforgiving calculus of global investment and tests the boundaries of capital market credibility. While education financing is a worthy goal, the mechanism raises troubling questions about property rights and market independence.
Legally grounded in the Finance Act 2020 that established the Unclaimed Funds Trust Fund (UFTF) as a custodian, not owner, of dividends unclaimed for six years or more, this custodial framework distinguishes Nigeria’s approach from outright forfeiture, offering legal cover for the transfer. But legality is not propriety.
Market independence and credibility at stake
Expropriating these funds, even under the guise of a loan or asset re-allocation, sends a troubling signal to domestic and foreign portfolio investors. It suggests that capital market structures are vulnerable to fiscal raiding when state coffers run dry. Nigeria cannot treat a statutory perpetual trust as a disposable piggy bank. Otherwise, it risks weakening institutional credibility.
