The Federal Government’s use of dormant bank balances and unclaimed dividends as part of its domestic borrowing programme may be legally defensible, but investors warn that it carries a more delicate risk: the erosion of confidence. In a market trying to deepen retail participation, attract foreign capital and modernise trading infrastructure, the handling of unclaimed funds has become a test of property rights, transparency and trust.

A Borrowing Strategy Meets a Confidence Question

Nigeria’s capital market is again confronting one of its oldest contradictions: the state needs money, but the market needs trust.

Stock market investors have urged the Federal Government to reconsider, clarify or better safeguard its use of unclaimed dividends and dormant bank balances as part of its domestic borrowing programme, warning that the policy could discourage market participation, especially among retail investors.

The immediate concern follows reports that the Federal Government raised ₦100 billion through the Unclaimed Funds Trust Fund, effectively drawing from dormant bank balances and unclaimed dividends within the broader domestic debt framework. Market analysts say the amount may be modest relative to Nigeria’s total debt stock, but its symbolism is substantial because the funds originate from private investors and bank customers.

In a fragile market ecosystem, symbolism matters. Investors do not only ask whether their money can be invested profitably. They also ask whether it is safe, traceable, reclaimable and protected from policy overreach.

Why Investors Are Uneasy

Mrs Bisi Bakare, National Coordinator of the Pragmatic Shareholders’ Association, captured the anxiety with unusual clarity. She warned that the borrowing of unclaimed funds could pose a potential risk to asset security if not managed with strong transparency, accountability and clear repayment structures.

Her concern goes to the heart of the issue. Unclaimed funds are not ownerless funds. They are assets temporarily separated from their rightful owners by poor documentation, legacy registrar inefficiencies, investor ignorance, deceased estates, migration, forgotten accounts or weak financial-record systems.

That means the state’s handling of such funds must be clinically transparent. If investors begin to suspect that dormant assets are vulnerable to fiscal appropriation, confidence could weaken—not only among old shareholders but also among new retail investors whom the market is trying to attract.

Bakare’s position is not a rejection of reform. Rather, it is a call for safeguards. Proper legal backing, investor protection, accessible claim procedures and prompt repayment are the minimum requirements for a policy of this sensitivity.

The Legal Frame: Trust, Not Confiscation

The Unclaimed Funds Trust Fund emerged from the Finance Act 2020 architecture as a mechanism for warehousing qualifying unclaimed dividends and dormant balances. Under the framework, unclaimed funds are treated as a special debt owed by the Federal Government to the rightful owners and are expected to remain claimable. Legal analysis of the framework notes that unclaimed dividends and dormant balances transferred into the fund may be claimed by owners, together with any applicable returns.

The Central Bank of Nigeria has also stated that its guidelines on dormant accounts and unclaimed balances are designed to identify and reunite such assets with their rightful owners while holding them in trust until they can be claimed.

That distinction is critical. A trust fund must be managed like a trust, not like a windfall. If government borrowing from the pool is perceived as routine fiscal convenience, the policy risks being read by investors as a quiet weakening of property rights.

The legal question may be settled on paper. The confidence question is not.

Property Rights and the Retail Investor Problem

Nigeria’s capital market has spent years trying to bring ordinary citizens back into equities. Many retail investors still carry the scars of previous market crashes, unpaid dividends, missing certificates, poor registrar service and low investor education.

For this class of investors, the idea that unclaimed dividends could become part of government borrowing may sound unsettling, even where the law provides for eventual claims. Market confidence is often emotional before it becomes rational. Once fear enters the system, it can reduce participation, increase scepticism and weaken the savings-to-investment chain.

Mr Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, was more direct. He argued that government should protect citizens’ assets, not borrow from them. His objection reflects a broader philosophical concern: the state should not appear to benefit from the inefficiencies that caused dividends and bank balances to become unclaimed in the first place.

In a market seeking depth, that concern deserves attention.

The Real Problem: Unclaimed Dividends Are a System Failure

The debate should not be reduced to whether government can legally borrow from unclaimed funds. The deeper question is why such funds remain unclaimed in the first place.

Unclaimed dividends are symptoms of structural weakness. They point to poor identity harmonisation, outdated shareholder records, inefficient estate administration, weak financial literacy, multiple investor accounts, legacy paper certificates and insufficient public education.

The Securities and Exchange Commission already provides a process for investors to search for unclaimed dividends, identify registrars, download e-dividend forms and submit them through banks or registrars for direct dividend payment.

But process is not the same as access. If millions of investors do not know how to use the process—or find it too cumbersome—the problem will persist.

What Nigeria needs is not merely a trust fund. It needs a national investor-reconnection campaign.

Transparency Is the Minimum Price of Trust

For the policy to avoid market damage, five things are essential.

First, there must be a publicly accessible, regularly updated database of unclaimed funds.

Second, every investor must be able to verify claims easily through simple digital and physical channels.

Third, repayment must be fast, predictable and accompanied by clear rules on interest or returns.

Fourth, the fund must be independently audited and reported in language ordinary investors can understand.

Fifth, the government must communicate clearly that these funds are not revenue and not abandoned assets, but private property held in trust.

Without these safeguards, the policy may create a dangerous impression: that inactivity equals vulnerability.

Trading Hours: A Positive Reform in a Sensitive Moment

Interestingly, investors are raising these concerns at a time when the Nigerian Exchange is pushing through market-modernisation reforms.

The NGX has announced the expansion of trading hours from 9:00 a.m. to 4:00 p.m. West African Time, effective Monday, April 27, 2026. The Exchange says the move is intended to deepen liquidity, improve price discovery, broaden investor access and align the market more closely with global standards.

Mrs Bakare described the extended trading window as a positive structural development, noting that it gives both local and foreign investors more flexibility to participate, especially those operating across different time zones.

Igbrude also welcomed the reform, arguing that the longer window gives investors and brokers more time to trade, especially at a period when market capitalisation has reached historic thresholds.

This is the irony of the moment: one arm of the market is opening the door wider to participation, while another policy debate risks making some investors more cautious about stepping through it.

Beyond Longer Hours: Settlement Speed Matters

Prince Ridhwan Hamza, Secretary-General of the Liberated Shareholders’ Association, also welcomed the idea of improving market access, but argued that reform should go beyond trading hours. In his view, the market should push more aggressively toward faster settlement, including T+0.

That is a serious point. Longer trading hours may improve access, but faster settlement improves trust. Investors, especially younger retail participants accustomed to instant digital payments, increasingly expect financial systems to be fast, transparent and responsive.

Nigeria has already completed its shift to a T+2 settlement cycle and has signalled ambition toward T+1. NGX commentary on the transition has framed shorter settlement as a way to reduce risk, improve liquidity, strengthen confidence and align Nigeria with global market standards.

The bigger capital-market agenda is therefore clear: access, speed, transparency and protection must move together.

BRANDECONOMY Insight

The controversy over unclaimed funds is not just about ₦100 billion. It is about the psychology of ownership in Nigeria’s financial system.

Capital markets are built on a simple promise: if citizens entrust their savings to listed companies, banks, brokers and market infrastructure, their rights will be protected even when they are absent, inactive, uninformed or temporarily disconnected from the system.

Once that promise becomes doubtful, participation suffers.

The Federal Government may have legal authority to warehouse and invest unclaimed funds under the established trust framework. But legality is not the same as legitimacy in the eyes of investors. Legitimacy comes from transparency, reclaimability, speed of repayment, independent reporting and public confidence that government is acting as custodian, not beneficiary.

Nigeria’s capital market is at a crucial point. The NGX is extending trading hours. Settlement cycles are improving. Domestic participation is rising. Pension and institutional liquidity are deepening. Foreign investors are watching Nigeria again. But all these gains depend on trust.

If unclaimed funds are handled carelessly, retail investors may interpret the policy as another reason to stay away from the market. If handled transparently, however, the debate could become an opportunity to clean up legacy dividend problems, reconnect millions of investors to their assets and modernise shareholder records.

The choice is clear. Nigeria must not use unclaimed funds in a way that deepens market suspicion. It must use the moment to prove that investor assets remain sacred, traceable and recoverable.

That is how markets grow: not by asking investors to trust blindly, but by building systems that make trust rational.

Investor Takeaway

The Federal Government’s use of unclaimed dividends and dormant balances may be backed by law, but it must be managed with exceptional transparency. For investors, the key issues are not only whether the funds can be used, but whether owners can easily trace, claim and recover them without friction.

The NGX’s extended trading hours are a welcome modernisation step. But market participation will only deepen if structural reforms are matched by stronger investor protection, faster claims processing, improved dividend education and visible respect for property rights.