ABUJA – Nigeria plans to use unclaimed dividends held by companies and dormant bank accounts to finance its growing deficit and revive an economy hobbled by low oil prices, an official said.
The government will transfer company dividends which have been unclaimed for more than six-years, totalling more than 180 billion naira ($472 million), into a fund managed by Nigeria’s debt office and then borrow from it, Bode Oyetunde, presidential adviser on fiscal matters said on Thursday.
Dormant bank accounts will also be included in the plan by the government of Nigeria, which relies on oil for much of revenues and foreign exchange, Oyetunde said.
The government has been exploring ways to raise revenue after an oil price crash tipped Africa’s largest economy into its second recession in five years.
“It is a debt owed by Nigeria to Nigerians. It will be used by government to finance the budget deficit,” Oyetunde told a virtual conference on tax policy.
“We have to expand the range of instruments available to support the government fund its operation.”
The unclaimed dividends are those of companies listed on the Nigerian stock market, he said adding that funds will be available to claim if a beneficiary is identified.
Nigeria with one of lowest tax to GDP ratios in the world is reforming its tax policy so that foreign companies like Google, Uber and Microsoft, that generate revenues in the country with no local presence will be taxed.
The West African country shelved offshore borrowing last year due to COVID-19 disruptions and turned to domestic markets.
It now plans to rebase its gross domestic product to determine the current structure of its economy.
The government has been in talks with the World Bank for a $1.5 billion budget support loan which the bank has made conditional on the Nigeria carrying out reforms.