Unclaimed dividends and bank account balances unattended for at least six years will be available as special credit to the federal government through the Unclaimed Funds Trust Fund. According to the Finance Act 2020 recently signed into law by President Muhammadu Buhari, the trust fund will be a sub-fund of the Crisis Intervention Fund. The act exempts official bank accounts owned by the FG, state or local governments or any of their ministries, departments or agencies. According to the act, the monies transferred to the trust fund will be a “special debt owed by the federal government to shareholders and dormant bank account holders”. It also states that the original owners of the money can claim it at any time. The operation of the trust fund will be supervised by the Debt Management Office (DMO) and governed by a governing council chaired by the finance minister and a co-chairperson from the private sector appointed by the president. This move will make needed funds available to the federal government without foreign exchange worries or conditions attached to loans from multilateral lenders. Other members of the governing council shall include the governor of the Central Bank of Nigeria, director-general of the Securities and Exchange Commission (SEC), managing director of the National Deposit Insurance Corporation (NDIC), a representative of the registrars of companies, two representatives of the shareholders’ association, a representative of the Bankers’ Committee and the director-general of the Debt Management Office as the secretary of the trust fund.

Nigeria is not subsiding petrol and has no plan to do so, Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Tuesday. She also stated that the government did not make any provision for electricity subsidy in 2021 and would not subsidise power. Responding to a question on whether the reduction in petrol price about a month ago had led to the return of subsidy, while speaking during a virtual meeting in Abuja, Ahmed said, “The answer is a flat no. “We are not bringing back fuel subsidies. We didn’t make provision for fuel subsidy in the budget. The impact of what was done was reducing some of the cost components that were within the template. And also related to it, on matters of electricity subsidies, no provisions have been made for subsidy for fuel and no provisions have been made for subsidy for electricity.” Ms Ahmed stated that the government would hold the unclaimed dividends of investors in the stock market in trust and would make the fund available when needed by an investor. Abuja removed petrol subsidies in March 2020 after reducing the pump price of the product to ₦125 per litre from ₦145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.

The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Farouk, on Thursday, said the country currently has over two million displaced persons. She said the affected persons were displaced as a result of the activities of insurgents and bandits or through communal clashes. Ms Farouk said this after a visit to President Muhammadu Buhari, at the Presidential Villa, Abuja. The minister said, “As of today, we have over two million displaced persons in the country, ranging from those displaced by insurgency, banditry, communal clashes and so on. She said, “The ministry is doing its best to see that people who are displaced in this country are given the necessary support by way of supporting their livelihoods, rebuilding their homes in areas of disasters and settling those who have fled their places seeking refuge, provided their communities are safe for them to return. This is what we are working on and we hope to achieve the desired result.” On the purpose of her visit to Buhari, Ms Farouk said it was meant to thank the President for his support on issues relating to persons with disabilities in the country. She recalled that the President had in January 2019 assented to the bill on the prohibition of discrimination against persons with disabilities in the country, describing it as the first milestone. “Mr President also graciously appointed the chairman, board members and the executive secretary of the National Commission for Persons with Disabilities. “So, this is a visit to demonstrate our appreciation and our commitment to the administration of President Muhammadu Buhari,” she said.

Pro-Donald Trump protesters, upset at the outcome of the presidential election, stormed the US Capitol on 6 January as Congress met to tally the electoral votes that certified Joe Biden’s election as president. Protesters overwhelmed US Capitol Police outside and numerous protesters breached security and entered the Capitol building, creating a scene of chaos and causing members of Congress to flee the House and Senate chambers to be safely locked down in their offices while some were evacuated elsewhere. After breaching barricades, Trump supporters were seen walking through the building, waving flags and clashing violently with security. While Senators were debating an objection to Arizona’s electoral votes raised by Republican Trump supporters, the debate was halted when word came that protesters were in the hall outside of the Senate chamber. President Donald Trump, in a video posted on Twitter, has told supporters he knows how they feel and repeated false claims that he won the presidential election, before urging them to go home in peace. By 8 January, Twitter indefinitely suspended Donald Trump’s Twitter account, a move he called “divisive,” a “catastrophic mistake” and a “horrible thing for our country and to our country.” In another Silicon Valley related development, Facebook said on 11 January that it had removed a network of accounts and pages linked to Uganda’s information ministry. The ministry used the fake accounts to “manage pages, comment on other people’s content, impersonate users, re-share posts in groups to make them appear more popular than they were,” Facebook said in a statement. Uganda is holding the presidential election on Thursday. Long-time leader Yoweri Museveni is facing a challenge from opposition frontrunner Bobi Wine, a pop-star turned politician.

Commentary

  • Following President Buhari’s signing of the 2020 Finance Act into law at the end of December 2020, the Federal Government appears to have given itself a sufficient legal basis to “borrow” funds from unclaimed dividends and dormant bank account balances unattended for at least six years. As expected, capital market stakeholders have kicked against this, arguing that the government lacks powers to manage funds belonging to private sector investors and the directive conflicts with a 2015 guideline of the Securities and Exchange Commission which directs that “companies and registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this Rule transfer such monies into the Nigerian Capital Market Development Fund (NCMDF)”. Away from the regulatory confusion, there is the scarier prospect that the government may just be warming up for the real prize, and its singular focal point, is access to ₦11 trillion worth of pension fund assets. The 2021 budget has a deficit provision of ₦5.2 trillion (or 38% of the entire budget) and policymakers are desperately seeking sources of cheap funding. The unclaimed dividends policy effort may very well be the preview to a more disturbing and dystopian regulatory marketplace. What we find ludicrous though, as we will see later on in this editorial, is that going after unclaimed dividends or even the pensions are a one-time source of funds which the government is looking at while ignoring potentially recurring sources of income.
  • In 2020, Nigerians saw increases in the retail price of petrol in four months, rising from a band of ₦121.50–₦123.50 per litre in June to ₦140.80-₦143.80 in July, ₦148-₦150 in August, ₦158-₦162 in September and ₦163-₦170 in November. Since 13 November, when retail prices were last increased, the price of the international oil benchmark, Brent, has increased by 35%, from $41.51 per barrel to close at $51.22 per barrel on 31 December. Fuel marketers had expected another upward adjustment of petrol prices in December  to reflect this rise. Instead, a ₦5 reduction, effective 14 December, was announced by the Federal Government – a development that left them reeling in shock and asking whether prices were really deregulated. Indeed, the lead story in Wednesday’s edition of Nigerian financial daily, BusinessDay has gone so far as to explicitly state that the petrol subsidy has returned. The global price of crude accounts for a large chunk of the final cost of petrol, and the country has continued to spend so much on petrol imports for many years amid low domestic refining capacity. The minister’s explanation on achieving a price reduction therefore begs many questions. Energy prices will always be volatile – therefore, the Nigerian government needs to allow appropriate, market driven price discovery, and then focus on solving the intractable problems of crude refining as well as power generation and transmission (which consumes a lot of our imported energy) in order to drive costs down from a production as opposed to a consumption standpoint.
  • At two million IDPs, Nigeria has added at least 800,000 IDPs in the past six years and is now the country with the fifth highest number of internally displaced persons globally. These figures represent a clear but depressing measure of the level of internal conflicts in the country, both in terms of intensity and frequency. While the Boko Haram insurgency in the North-East isn’t displacing people on the scale it used to, the banditry crisis in the North-West and farmer-herder clashes in the Middle Belt have contributed quite significantly to the recent surge in IDP numbers. There are also low-level conflicts over boundary and land allocations in parts of the South-East and South-South, such as between Ebonyi and Cross River that have been minor contributors. Overall, without resolving these security challenges, it will be very difficult to resettle these IDPs, not to mention the likelihood that more persons might get displaced. For example, the target of the Borno State Government to return persons displaced by Boko Haram to their villages by the middle of this year will increase the risks such people are exposed to, as both factions of Boko Haram are still very active in rural parts of the state.
  • The riot by pro-Trump supporters was not unpredictable considering how Mr Trump had ramped up his rhetoric with claims of a stolen election as the certification of the election by the US Congress approached. The immediate cause was a lapse of security planning by the agencies in charge of securing the Capitol building and that was quite avoidable. Following his actions, it also became very hard for social media sites like Facebook and Twitter to continue allowing Mr Trump to use their platforms for incendiary purposes. This has, predictably, raised questions about the power that these platforms wield to censure political views that they find unpalatable and tilt the political field as they will. Despite having one of Africa’s most extensive crackdowns on opposition voices and wider freedom of expression, Facebook’s actions in Uganda, set within the backdrop of a turbulent political history, raise similar questions. The questions are valid and have been asked by many stakeholders, including leaders of countries like Germany which have significantly more stringent laws around public speech. Questions range from the specific basis of the removal as the two tweets that Twitter quoted require a significant degree of creative interpretation to be deemed to have broken the specific terms and conditions, to whether big tech should have such a power on their platform and how much responsibility the firms take for other more directly incendiary posts on their platforms (including posts by President Trump during his tenure before he lost the elections) which they did not take similarly drastic actions against. In Nigeria, as with many countries, the sceptre of misinformation around politics and social issues (the coronavirus pandemic and the End SARS movement being recent cases in point) has led to accusations from pro-government elements that Western social media companies are exercising an outsize and often nefarious influence on domestic issues and calls for tighter regulation. Their point is not totally nonsensical. What Facebook and Twitter have actually shown by their actions last week in Africa and North America is that their decade-long argument that they can’t make editorial judgements over content posted on their platform is fraying at the edges. They indeed, are capable of making these judgements and like all other establishments empowered with this power, they should be checks. Regulators around the world have taken notice, setting up an inevitable clash between online freedom advocates and wary policymakers. The era of the open, free spirited, Section 230 Internet is coming to an end.