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Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts - Politics - Nairaland

Nairaland Forum / Nairaland / General / Politics / Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts (16834 Views)

Minimum Wage: Disquiet As FG Makes Selective Payment / CBN Tells Banks To Hand Over Funds In Dormant Accounts, Unclaimed Dividends / Disquiet As Lawmakers Plan To End President, Governors’ Second Term (2) (3) (4)

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Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by zakim(m): 6:25am On Jan 17, 2021
The recently signed Finance Act, which empowers the federal government to help itself to a loan of N850 billion naira from dormant accounts and unclaimed dividends, is creating concerns amongst Nigerians.

Through the Act, the federal government is targeting some N850bn from the said funds. It could be more as the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said that the figure is still being computed but N850bn is within sight.

“There would be as much as N850 billion. We have to get the exact report from the CBN and then Company’s Registrar to ascertain that so it could be realised into this special trust fund for unclaimed dividends and dormant accounts,” she said.

The loan, the government said, would be used to fund the 2021 budget.

Policy Will Dampen Investors’ Confidence – Analyst
However, some industry watchers say the policy will dampen investors’ confidence and create uncertainty in the sector.

A onetime Security and Exchange Commission commissioner, Charles Udora, raised some underlying issues on the policy.

“Are the dormant account balances limited to any specific amount or will the borrowing take everything in all dormant accounts in all deposit money banks?

“Remember that some may have dormant accounts resulting from being sent out for a period on official assignments or have travelled for studies, etc. They return to the country to discover that their entire savings have been cleared via ‘FGN borrowing from dormant accounts.’ What will such persons do to continue their lives?” he asked.

He also raised concerns about the one-sided contract the government will be entering with these account holders.

“With whom will the FGN be entering into the borrowing contract in view or the state of the Law of Contract in Nigeria, especially in terms of capacity to enter into a valid contract, consideration, parties to the contract, etc? With whom did the FGN negotiate the ‘borrowing’?

“Who is representing the interest of the investors whose dividends will be borrowed? What are the terms and conditions of the borrowing and who negotiated them? How will the borrower pay back principal and interest? What will be the effect of the 12 years Statute Bar on Unclaimed Dividends borrowed by the FGN if the borrowed funds are not repaid within the 12-year window from the declaration of dividends to repayment by the FGN? Who is going to hold FGN accountable?” Mr Udora asked.

Udora’s concerns are not new, however, as before the bill was passed by the National Assembly, federal lawmakers, at a public hearing, expressed concerns over drawing funds from various dormant accounts and unclaimed dividends.

Their concern was hinged on fund availability if the rightful owners of the monies showed up.

During the hearing, the Chairman of the Senate Committee on Finance, Senator Solomon Adeola, posed the question to the Minister of Finance, Budget and Planning.

“We have funds sitting in the registrars and funds sitting in the banks which are not helpful to the system,” the minister, Mrs Ahmed, said.

“The government is just trying to make use of the funds in the interest of Nigerians because there is no point having idle funds in the banks whereas government needs money to carry out many developmental projects.”

The minister also acknowledged the concerns of Nigerians about the government’s plans.

“This is well-intended,” she said. “Some shareholders may not be happy. Certainly, no regulator is happy. The United Kingdom also has a provision that dividends not claimed after four years, revert to the companies that issued them.”

She said that the Debt Management Office issues securities to the registrars in case owners of such unclaimed dividends or deposit in dormant accounts come forward to claim their entitlement.

“It is possible that a different arrangement is in place in other jurisdictions but I want to state that in the amended CAMA, there is a provision that had modified the section that mandates the registrars to return unclaimed dividends after 12 years to the companies that paid the dividends in the first instance. Rather than the companies to take back the money and redistribute, the government wanted to manage the funds,” she said.

She said the fund managers that would be set up would give details of the procedure of how the funds would be managed.

However, representatives of the Independent Shareholders Association of Nigeria, disagreed, saying that unclaimed dividends belong to shareholders, not the government.

Unclaimed dividends, they said, should never be entrusted in the hands of government but reverted to the company that issued them.

It Will Trigger Panic in Banking Sector
Mr Udora, mentioned earlier, on the other hand, said the borrowing strategy, process and procedures have consequences on the larger economy of the country.

“The greatest consequence of this type of ‘borrowing’ is the potential to trigger panic in the investment community and create an atmosphere of flight to safety which is another acronym for a possible run on banks with obvious consequences,” he said.

He further noted that there is enough tension already caused by the COVID-19 pandemic, coupled with the localized threats to the nation’s economy because of insecurity, recession, unemployment, high inflation and “seemingly uncontrollable foreign exchange rates with very little hope of any significant improvement in our foreign exchange receipts”.

He said one of the immediate consequences of the implementation of the borrowing plan is the “unforeseeable further loss of value of the Nigerian Naira.”

“This will result from the loss of faith and confidence in the currency and a possible rush by investors to change the store of value of their assets (both cash and non-cash).

“This action will put further pressure on the already stressed state of our foreign reserves. It will also panic foreign investors to begin to divest in anticipation of a bearish market upon commencement of the borrowing plan”, he noted.

He also said public limited companies will begin holding back on dividend declaration as a means of retaining their funds.

“This action on its own will discourage investors and inflows into the capital market will drop. All these events will end up affecting trade, business and ultimately the taxes of all types may see a decline,” he said.

He called on the federal government to reconsider its proposed borrowing plan and be a little more ingenious about the plan to forestall the attendant “disastrous consequences.”

What is the Finance Act 2020?


On December 31, 2020, President Muhammadu Buhari signed the Finance Bill, 2020 (now Finance Act) into law. The Act, which has a commencement date of January 1, 2021, was signed into law alongside the 2021 Appropriation Bill (now Appropriation Act). The Act introduces significant changes to some tax and regulatory laws in Nigeria including the introduction of COVID-19 incentives alongside other changes.

The Finance Act 2020 Part XV made provisions for the Establishment of Unclaimed Dividends Funds.

It provided that “Subject to Section 44 (1) (h) of the Constitution of the Federal Republic of Nigeria, 1999, there is established by the trust, as a sub-fund of the Crisis Intervention Fund, an unclaimed Funds Trust Fund.”

Thus, “from the commencement of this Act, any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilized amount in a dormant bank account maintained in or by a deposit money bank, which has remained unclaimed or unutilized for a period of not less than six years, from the date of declaring the dividend or domiciling the funds in a bank account, shall be transferred immediately to the Unclaimed Funds Trust Fund.”

The provision exempted government-owned accounts. It said, “provided that this section shall not apply to official bank accounts owned or belonging to the Federal Government, State Governments or Local Governments or any of their Ministries, Departments or Agencies.”

The Act also provided that the Debt Management Office shall supervise the operations of the fund.

The Act prescribed sanctions for default. It indicated that any financial institution that failed to remit the unclaimed dividends shall be liable to a fine three times the amount unremitted.

It also said that owners of the funds can claim the funds at any time.

“Such unclaimed dividends and utilized amounts in a dormant bank account transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and dormant bank account holders respectively and shall be available for claim, together with the yield thereon, by the shareholder and the bank account holder at any time, pursuant to the aforementioned perpetual trust,” it said.

https://dailytrust.com/finance-act-disquiet-as-fg-targets-n850b-from-dormant-accounts

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Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by helinues: 6:34am On Jan 17, 2021
Only if FG would be transparent on how to spend the money.

Still better for FG to get the loan from the dormant accounts than allowing those crooked bankers to be using it anyhow.

20 Likes 3 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by CodeTemplar: 6:45am On Jan 17, 2021
Borrow n share govt

9 Likes 2 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Racoon(m): 6:46am On Jan 17, 2021
Guess they will start auctioning their citizens in the next case since the financial crunch is biting them this hard.
This is what cluelessness, incompetency or lack of a feasible economic blueprints can cost a nation.

81 Likes 7 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by capatainrambo: 6:49am On Jan 17, 2021
I have money in my first bank havnt touched it close to 13 yrs now.


If first bank give fg my money they will pay me back undecided

102 Likes 4 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Racoon(m): 6:51am On Jan 17, 2021
helinues:
Only if FG would be transparent on how to spend the money.Still better for FG to get the loan from the dormant accounts than allowing those crooked bankers to be using it anyhow.
The question is-what have the FG done with all the chronic borrowings they have gotten? What became of all the so called revenues generated from TSA, NPA, NCS, FIRS, NNPC, etc as claimed by the government?

Govt even borrowed pensioners monies when a crooked former civil service pension boss Abdulrasheed Maina is undergoing a shabby probe for corruptly enriching himself with the peanuts these retirees get @ the end of the day.

No nation survives on borrowing.Indiscriminate borrowings and serving debts is not a sound economic policy especially in an oil-dependent non-economy like Nigeria.Debt servicing is not debt payment.

67 Likes 5 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by helinues: 6:52am On Jan 17, 2021
Racoon:
The question is-what have the FG done with all the chronic borrowings they have gotten? What became of all the so called revenues generated from TSA, NPA, NCS, FIRS, NNPC, etc as claimed by the government?

Govt even borrowed pensioners monies when a crooked former civil service pension boss Abdulrasheed Maina is undergoing a shabby probe for corruptly enriching himself with their peanuts these retirees get @ the end of the day.

Femi Adesina should be able to answer all your questions

4 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Racoon(m): 6:55am On Jan 17, 2021
helinues:
Femi Adesina should be able to answer all your questions
Even you too know that the rabblerouser is just a higher order graded zombie that is telling all manners of lies just to earn his pay.

Adesina added that he remains a “dyed-in-the-wool Buharist” irrespective of what others see as “foibles and failings of the administration”
https://www.thecable.ng/femi-adesina-nigeria-would-have-been-better-if-buharis-military-regime-had-lasted-longer

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Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Brightfab(m): 6:57am On Jan 17, 2021
capatainrambo:
I have money in my first bank havnt touched it close to 13 yrs now.


If first bank give fg my money they will pay me back undecided

grin grin

1 Like 1 Share

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Jesse6(m): 7:00am On Jan 17, 2021
If at all na better thing them go use the money do e for no pain anybody
Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Mysticwebb: 7:01am On Jan 17, 2021
Fidelity Bank don't give FG my money o, I will soon create out time to come and reactivate my account there and do the needful. I no won hear story.

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Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by zeusdgrt(m): 7:17am On Jan 17, 2021
Bad leaders

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Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by ArmaniUhuru: 7:17am On Jan 17, 2021
850 billions?

Now what’s the difference between this government and hushpuppi?



What about people that are outside the country and Thor accounts are dormant?

Shey Government go con collect their savings ni?

Thievesssssssss

28 Likes 3 Shares

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Starcrest1: 7:17am On Jan 17, 2021
After that what next, they will target the active ones.

This government ain't brilliant......

15 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by ATEAMS: 7:18am On Jan 17, 2021
Them know weytin them do
Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by AroleOduduwa2: 7:18am On Jan 17, 2021
I have never heard of any administration in the world who is as callous as Buhari led administration. You stole all our resources, mortgage the future of the unborn Nigerians and now this?

23 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by kayjay69(m): 7:19am On Jan 17, 2021
The only thing the Federal Government of Nigeria is left to do is basically arm rob it's own citizens.

Oh wait, they literally have all government agencies doing that already.

Restructure or this: the choice is pretty simple.

6 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Nobody: 7:19am On Jan 17, 2021
government wey we no dey ever understand

1 Like

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by udoakwa(m): 7:21am On Jan 17, 2021
The most useless government since the creation of Nigeria, buhari keeps breaking failed records back to back

5 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by sematec(m): 7:22am On Jan 17, 2021
if you get dormant acct, collect your change and close it

2 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by helinues: 7:22am On Jan 17, 2021
kayjay69:
The only thing the Federal Government of Nigeria is left to do is basically arm rob it's own citizens.

Oh wait, they literally have all government agencies doing that already.

Restructure or this: the choice is pretty simple.

Something they have been doing without using any ammunition..

They are called Smooth Criminals

6 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Livefreeordieha(m): 7:22am On Jan 17, 2021
zakim:


https://dailytrust.com/finance-act-disquiet-as-fg-targets-n850b-from-dormant-accounts
i just dey laugh diz people nor understand saytuface misleading lyrics of nothing dey happen Na just lyrics because something actually dey happen and go happen lol
Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Jostoman: 7:23am On Jan 17, 2021
helinues:
Only if FG would be transparent on how to spend the money.

Still better for FG to get the loan from the dormant accounts than allowing those crooked bankers to be using it anyhow.

you are always in support of evil, if any of my bank try nonsense with my bank account weather dormant or active they will have themselves to blame.

14 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by ArmaniUhuru: 7:23am On Jan 17, 2021
sematec:
if you get dormant acct, collect your change and close it


Some people dey Yankee like this

2 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Jostoman: 7:23am On Jan 17, 2021
All this bank are playing with fire, so I will go to the bank now that I want to reactivate my dormant account my bank will now be telling me Nonsense.
Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Yakubu113: 7:24am On Jan 17, 2021
When will the FG pay back the money. The world borrow is just use to deceive people that still believe in them anyway.

2 Likes

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by MANNABBQGRILLS: 7:24am On Jan 17, 2021
Questions arising from this dormant account brouhaha.

Who is representing the interest of the investors whose dividends will be borrowed?
What are the terms and conditions of the borrowing and who negotiated them?
How will the borrower pay back principal and interest?


Remember that some may have dormant accounts resulting from being sent out for a period on official assignments or have travelled for studies, etc.
They return to the country to discover that their entire savings have been cleared via ‘FGN borrowing from dormant accounts.’
What will such persons do to continue their lives?

These are some of the questions we need answers to before this can move on.
We need all the transparency in this transactions.
This is the CHANGE we voted for, no more business as usual,
knowing that the evil and looting party would have just carry on through the backdoor stealing citizens money and looting it to their account without minding whose ox is gored.

On a lighter note,
$850 BILLION Naira wey some people no dey use again.... some for many many years?!
Money dey where e dey for dis country abeg!

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Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by gambia(m): 7:24am On Jan 17, 2021
This country is completely finished.
Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by fitzmayowa: 7:24am On Jan 17, 2021
The government is just clueless of how to proceed with the affairs of this nation, the greatest mistake Nigerians made was to vote this clueless government in for 8 years....


They make life difficult for Nigerians daily, in the last 8 months it one policy or the other of make life difficult.

You deposit money you pay tax, you withdraw money you pay tax, VAT increased, inflation at over 15%, fuel subsidy they claim they've removed is back again with them paying 2 billion daily on that, now they are targeting dormant accounts....Whew!!!

1 Like

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Generalkorex(m): 7:25am On Jan 17, 2021
Money dey dormant account o

1 Like

Re: Finance Act: Disquiet As FG Targets ₦850 Billion From Dormant Accounts by Nobody: 7:25am On Jan 17, 2021
Put money for house buhari bandits would come and rob it.

Put it in the bank buhari himself would go and rob it.


All kind of tarrifs have been placed to deposit, transfer and cash out yet it's not enough for them

Electricity prepaid cards have gone up (it doesn't last again)

Data has gone up (it doesn't last again)

Transportation fares have gone up

Rice has gone up

Fuel has gone up

Universities just coming from months strike (no certainty on what next )

Cable Subscription has gone up

Dollar rate against naira has gone up

All these tarrifs and yet excessive borrowing and nothing to show for it

Boko Haram, Bandits, Fulani Herdsmen are on an all time high

Government Nepotism at an all time high


People can't go to the farm for fear of Herdsmen

People can't travel useless roads for fear of getting kidnapped by bandits




Yet some are still supporting this government like they are not affected, you speak they shit blame on government behalf

14 Likes

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