How The Government Plans To Spend The Money In Your Dormant Account

This is one of those news that gets lost in the flurry of political gist we hear everyday. The Nation reports the Government plans to borrow funds lying in dormant accounts and use it to finance  building of houses.  It seems like a good idea on paper but we know how things like this work in Nigeria. In fact they have already assumed most of the money lying in dormant accounts are owned by corrupt politicians and dead people.

“Dormant accounts”, according to a letter to President Goodluck Jonathan, “are largely the pool of funds that the corrupt and unrighteous had stacked away until subsequently overcome by death or other incapacities.”

Unrighteous?? Who made you lord? It is important to note that for this to even work I believe laws such as the NDIC and BOFIA may have to be amended to give Government Powers to access such funds unless they want to use fiat through the CBN to compel banks to lend the money to the Government.

How do they plan to spend it? Like I mentioned they plan to use the money to build houses and bridge the housing deficit which they put at 17million. Once completed the house is sold to buyers first as a form of finance lease where rather than pay principal and interest the tenants will pay rents and then after five years of non default the rent will be converted to equity.

The security for using these funds, according to the Committee, would be tied to a “Rent to Own Contract.” According to the proposal to the President, “A ‘Tenant’ is promised a conditional Rent to Own Contract if he does not default in first three years. This conditional contract that is signed in the third year becomes effective in the fifth year at which point all past rents are converted to deposits for owning the flat at a predetermined price.

At the contract signing in the fifth year, a new condition is given that should the tenant default for a period of three consecutive months there will be a foreclosure with refunds of only a percentage of the payment from the contract period (from the fifth year).”

Do you think this is a good idea? Is your dormant account worth reactivating?