Parliament should now protect unclaimed assets from looters
What you need to know:
But what constitutes a natural disaster, according to this bill? The problem is that the Bill explains “natural” in quite broadly.
If this Bill is passed, the government will have powers to raid the fund by applying all manner of excuses.
Parliament must reject this Bill so as to protect the fund from being raided by the marauding eating chiefs.
According to the latest statistics in the public domain, the assets sitting in the books of the Unclaimed Financial Assets Authority have been growing rapidly.
As at March 31, 2018, this little-known fund had assets amounting to Sh39 billion — Sh13 billion in hard cash and the rest in shares and government securities.
While we all agree that the government is under extreme pressure to raise money to fund the fight against the Covid-19 pandemic, it needs to be reminded that the money in the Ufaa coffers belongs to private individuals and cannot be spent by the State as if it were tax revenues.
The pandemic must not be used as an excuse to raid these private assets that have been entrusted to the State for safekeeping and management.
I just don’t understand why people in authority find it difficult to appreciate the simple fact that the money sitting in entities, such as the Ufaa, Public Trustee Fund and National Social Security Fund, is private property the State is not allowed to touch.
Forgive me if I come through as ranting about issues that should be obvious. I’m compelled to comment on these matters because there are signs that the government is preparing to raid the Ufaa.
I recently came across a proposed draft law, titled Unclaimed Financial Assets Amendment Bill 2020, that seeks to give the government powers to raid Ufaa.
If passed, the government will have powers to raid the fund at will. The only condition will be that withdrawal of the money will only be allowed to finance an event occasioned by national disasters and pandemics such as Covid-19.
Parliament must kill this Bill before it sees the light of day. What the sponsors of this amendment are trying to do amounts to converting unclaimed assets belonging to private owners into tax revenues.
Which begs the question: Where did these billions the government is so keen to grab originate from in the first place?
First, you migrated from Nairobi a long time ago, leaving behind some small amount of money in a fixed deposit account, or stopped transacting on a savings account, leaving behind the minimum deposit you paid at the time of account opening.
Declared as abandoned
Secondly, unpaid dividends sitting on the books of quoted companies, which private individuals have not claimed for years, or a life insurance policy that matured long after somebody stopped working, migrated to the village and ultimately died.
Thirdly, you retired and left Nairobi a long time ago without claiming a deposit you paid to a utility company such as Kenya Power or Nairobi Water & Sewerage Company.
Monies kept for long periods in safe deposits boxes with commercial banks can also be declared as abandoned assets and consequently remitted to the authority.
The list of unclaimed assets handed over to the Ufaa is long and includes mature life insurance policies, travellers cheques, money orders and banker’s cheques that have remained uncashed for a long time.
Have we forgotten that the main reason the Ufaa was created was so that it could track and trace the owners of the money and give it to them or to their beneficiaries? What right does the government have to spend this money?
And it’s not as if the rightful owners, their heirs or beneficiaries don’t exist.
Since coming into being, the Ufaa has tracked down individuals and paid out Sh412 million to beneficiaries.
A baseline survey by the authority estimated that, as at October 2018, the estimated value of unclaimed assets still being held by banks, saccos, insurance firms and utilities was at a whopping Sh241 billion.
Greed and opportunity for rent-seeking is the reason the eating chiefs have come up with this Bill, which grants the National Treasury the authority to draw money from the unclaimed assets if there is “a natural disaster”.
But what constitutes a natural disaster, according to this bill? The problem is that the Bill explains “natural” in quite broadly.
If this Bill is passed, the government will have powers to raid the fund by applying all manner of excuses.
Can we assume that the government will now be allowed to raid the unclaimed assets kitty to fund fights against a locust invasion, drought, the perennial Budalang’i floods or even reacting to a terrorist attack?
The reason the original crafters of the law introduced the rule that 90 per cent of the unclaimed funds be invested in government securities was to insulate the fund from being misappropriated by the political elite.
Parliament must reject this Bill so as to protect the fund from being raided by the marauding eating chiefs.
