Fresh data from Nigeria’s Debt Management Office (DMO) shows that the Federal Government has tapped N100 billion from dormant bank accounts and unclaimed dividends, intensifying debate over the country’s rising debt burden.

In its latest domestic debt stock report, the DMO listed a new instrument — “UFTF FGN Security” — valued at N100 billion as of December 31, 2025. The figure represents about 0.12 per cent of Nigeria’s total domestic debt, which stood at N80.49 trillion.

The borrowing is backed by the

Unclaimed Funds Trust Fund (UFTF), a mechanism created under the Finance Act 2020. The law allows dormant account balances and unclaimed dividends to be pooled into a central fund, where they can be invested in government securities while awaiting claims by rightful owners.
Under the current framework, the UFTF is jointly managed by the DMO, the Central Bank of Nigeria (CBN), and the Securities and Exchange Commission (SEC).

Growing debt concerns

Analysts say the move reflects the government’s increasing search for alternative financing sources amid fiscal strain driven by weak oil revenues, declining income, and widening budget deficits.

Nigeria’s domestic debt remains heavily concentrated in conventional instruments. FGN Bonds account for N63.63 trillion (79.06%), followed by Treasury Bills at N13.85 trillion (17.21%), while Promissory Notes stand at N1.54 trillion. Other instruments such as Sukuk, Savings Bonds, and Green Bonds make up smaller portions.

Although the UFTF component is relatively small, experts say its significance lies in its source.
“These are funds belonging to individuals and shareholders, not traditional market borrowings,” a capital market analyst noted. “That raises concerns about transparency, investor confidence, and how quickly legitimate claims will be settled.”

Legal backing, public unease

The SEC has recently reiterated that dividends unclaimed for six years or more must be transferred into the trust fund, while maintaining that shareholders retain the right to claim their funds.

Unclaimed dividends in Nigeria are estimated at over N215 billion, highlighting the scale of idle private funds now potentially accessible to government financing.
However, civil society groups and market observers argue that reliance on such funds points to deeper structural issues in public finance.

Calls for fiscal discipline

Economists warn that continued dependence on borrowing — regardless of the source — is unsustainable without corresponding growth in revenue and productivity.

“There should be stricter limits on borrowing across all tiers of government,” one Lagos-based economist said. “Nigeria’s vast resources in agriculture, solid minerals, and industry remain underutilised.”
They argue that long-term solutions lie in boosting production, expanding exports, improving tax collection, and enforcing prudent public spending — rather than expanding debt through unconventional channels.

As Nigeria’s debt profile continues to climb, the use of dormant private funds has added a new dimension to the country’s fiscal debate, raising critical questions about sustainability, accountability, and economic direction.

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