Nigeria's domestic debt hits ₦80.49 trillion as Tinubu's government borrows ₦100 billion from unclaimed funds

• Nigeria’s domestic debt has surged to ₦80.49 trillion, with FGN Bonds remaining the largest component at approximately 79% of the total.

• The government borrowed ₦100 billion from the Unclaimed Funds Trust Fund (UFTF).

• This borrowing is authorised by the Finance Act 2020, allowing the DMO to invest these idle private assets into government securities.

• The move signals increasing pressure on government revenue, as authorities seek "unusual" domestic sources to fund budget deficits and avoid the risks of foreign exchange volatility.

Nigeria's domestic debt unclaimed funds borrowing UFTF has come into focus as the Federal Government raises ₦100 billion from idle private funds, pushing total domestic debt to ₦80.49 trillion, according to the latest data from the Debt Management Office.

This debt was all thanks to the Unclaimed Funds Trust Fund (UFTF), which is basically a collection of money from old, inactive bank accounts and dividends that no one has claimed for ages.

If you look at the numbers, the ₦100 billion makes up only about 0.12% of Nigeria’s entire domestic debt pile. On paper, that’s barely a dent. But what makes this step really noteworthy is that it’s taking all this idle private money and turning it into part of the government’s official public debt structure.

It’s also a sign of the growing pressure on government finances.

Nigeria's domestic debt has now hit ₦80.49 trillion, showing that the government has kept up its borrowing to cover budget shortfalls and keep things running. Looking at how this debt is structured, we can see that traditional tools are still the main players.

The biggest chunk, at ₦63.63 trillion, is made up of FGN Bonds, which account for about 79% of the total domestic debt. Treasury Bills come in second, totaling ₦13.85 trillion, or around 17%. Promissory Notes are worth ₦1.54 trillion, and Sukuk Bonds make up ₦1.19 trillion.

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Even though borrowing through the Unclaimed Funds Trust Fund (UFTF) is still relatively small in terms of the overall picture, it carries significant symbolic weight.

The use of these unclaimed funds is supported by policies set up under the Finance Act 2020. This setup means that dormant bank accounts and unclaimed dividends are gathered into the Unclaimed Funds Trust Fund. From there, the Debt Management Office, working together with the Central Bank of Nigeria and the Securities and Exchange Commission, manages the fund.

These funds can then be invested in government securities and counted as part of the public debt. It's important to note that the original owners of these funds still have the right to get their money back, including any returns earned, once they are identified.

Proponents view this as a sensible step, particularly given the current strain on government income. They argue that it puts dormant financial assets to work, ensuring they contribute productively instead of just gathering dust.

However, those with reservations are not easily swayed.

Worries have surfaced about using private money to cover public debts, along with questions over how things are being managed and how open the process is. There's also concern about what this might do to investors' trust. Some people involved even feel that, even if the money can eventually be claimed back, the policy itself raises ethical dilemmas about using private assets this way.

This move also mirrors Nigeria's wider financial situation.

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The country is still struggling with budget shortfalls, the increasing cost of servicing its debts, and weak revenue collection. To cope with these pressures, the government has been relying more and more on borrowing domestically, partly to steer clear of risks tied to foreign currency fluctuations.

Seen in this light, the decision to raise ₦100 billion from unclaimed funds doesn't look like a one-off action, but rather a part of a changing approach to borrowing.

Although it's a relatively small amount for now, it points to something larger—a move towards tapping into more unusual sources of funding as the pressure on public finances grows.

As Nigeria's debt pile within the country keeps rising, people will likely keep a close eye on whether this path is sustainable, if the process remains transparent, and ultimately, if the borrowed money is used to boost economic growth rather than make existing problems worse.