Still on FG’s planned seizure of ‘idle funds’

WHEN, in November last year, the Muhammadu Buhari-led Federal Government unfolded its plan to take over unclaimed dividends and unspent funds in the dormant account balances of Deposit Money Banks, we warned against the move, describing it as an anti-investment policy designed to rob citizens. However, penultimate week, the government, in typical fashion, doubled down on the plan, hinging its action on the Finance Act 2020, which purports to correct some anomalies in the Companies and Allied Matters Act (CAMA). Apparently, it had been unable to take its eyes off the unclaimed dividends and funds in dormant accounts, now put at N895bn.

Predictably, however, its statement was met with widespread disapproval. As noted by the Socio-Economic Rights and Accountability Project (SERAP), the Act relied upon by the government in its bid to seize depositors funds is illegal. As it argued, the right to property is a sacred and fundamental right, and borrowing unclaimed dividends and funds in dormant accounts amounts to an illegal expropriation, which would hurt poor and vulnerable Nigerians who continue to suffer under reduced public services,  and ultimately lead to unsustainable levels of public debt.  SERAP added: The right to property extends to all forms of property, including unclaimed dividends and funds in dormant accounts. Borrowing these dividends and funds without due process of law and the explicit consent of the owners is arbitrary and, as such, legally and morally unjustifiable.  The borrowing also seems to be discriminatory, as it excludes government-owned official bank accounts, and may exclude the bank accounts of high-ranking government officials and politicians, thereby violating constitutional and international prohibition of discrimination against vulnerable groups.

We are in full agreement with SERAP and other objectors to the government’s plan. In canvassing its position, the government has defied logic. It says it wants to “borrow” the funds in question, but adds, rather gratuitously, that the owners can access them anytime. Just how do you access, let alone spend money that is no longer in your account “at any time”? Why should the Buhari administration end the time-honoured practice of treating unclaimed dividends as part of the resources of the affected companies? Besides, why seek to borrow money without prior notification to the owners and without their consent? Should the state have the power to do whatever it likes with the hard-earned private savings and investments of citizens? Pray, how do you borrow money exclusively in your own terms?

It is indeed distressing that having imperiled the country’s economic future through ceaseless and unconscionable borrowings that only serve to advance the unending comforts of officialdom, the Buhari administration is now desperately going after private funds. In response to the averment by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, that the government’s move arose from altruism and had the sole intention of protecting the citizenry from being deprived of their money, we have already noted that she betrayed the government’s real agenda when she said the funds could be used to fund infrastructure projects. As we noted in previous editorials, with the resources and revenue available to the government, it has no business being broke. We have not been persuaded to change our submission that the government has many revenue-generating agencies that make tons and tons of money every month but make despicably insignificant returns to the government coffers without any consequences.

It is a fact, for instance, that the Department of Petroleum Resources (DPR) was queried last year by the Senate for remitting just N44.5 billion into the Consolidated Revenue Fund out of the N2.4 trillion it generated in 2019. The DPR management claimed to have deducted N88 billion, which is 4 per cent of the sum generated, as the approved collection fee! The agency deducted collection fee despite having staff who are on the government’s payroll, yet the Buhari administration which typically waxes lyrical about its anti-graft war simply looked the other way. The money that could not be accounted for, which the DPR claimed went into operational cost and overhead is about half of what the country will borrow to fund the 2021 budget, and one-seventh of the whole budget. We do not think another sentence is necessary on this point.

Pray,  if the Buhari government has not demonstrated capacity to manage its own funds, what guarantee is there that it would manage the unclaimed dividends and the funds in dormant accounts well? Hitherto, has it plugged the leakages in the system, cut down on its accustomed profligacy and managed the country’s resources and its revenue for the benefit of all Nigerians? The answer is pretty obvious. We insist that the plan to seize idle funds is sinister and should be shelved forthwith.

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