Federal House of Representatives Committee Chairman on Banking and Currency, Hon. Victor Nwokolo has assured Nigerians that the 9th National Assembly would take all necessary measures that would support the Asset Management Corporation of Nigeria (AMCON) in realizing the huge outstanding debt of over N5.4trillioon owed it by obligors before its sunset.
Recall that AMCON with the assistance of the 8th National Assembly successfully amended the AMCON Act, which President Muhammadu Buhari signed into law earlier in the year. The amended Act further provided AMCON with additional powers to deal with the obligors.
Since government is a continuum, Nwokolo who was addressing members of the House Committee on Banking and Currency at retreat, which began in Lagos on Wednesday affirmed that the National Assembly through the committee, which has oversight mandate over AMCON would work to ensure that AMCON not only performs its function satisfactorily but ensures that the corporation delivers on its expected mandate given that AMCON is a creation of the parliament in 2010.
While commending the previous assembly, the management of AMCON under the leadership of Mr Ahmed Lawan Kuru, its Managing Director/Chief Executive Officer, and the executive arm of government for amending the AMCON Act, the Chairman said the National Assembly will indeed continue to amend the Act until the federal government achieves that target for which AMCON was created in the first place, which is to stabilize the financial sector.
Given that the AMCON Act has been amended and already signed into law by President Buhari, Nwokolo said the national assembly will continue to strengthen the laws of the country on enforcement. He said enforcement has become critical given the tactics of the debtors, which has constrained AMCON from achieving optimum results especially since public funds were used to buy these loans that helped prevent the systemic collapse of the banking sector in Nigeria at the time AMCON was created in 2010.
AMCON Managing Director/CEO, who challenged the lawmakers to consolidate on the gains of the previous national assembly said it is in the interest of the Nigerian economy to recover the debt because it was not established as a charity organisation. He said AMCON raised its funds through a
Kuru said AMCON purchased 12,743 NPLs or EBAs worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs) for a purchase price of N1.8 trillion. The purchased are covered by various collaterals. AMCON also capitalizes three EFIs and provides financial accommodation to five. The corporation, he added had to inject a total sum of N2.2 trillion to ten banks – bridged and owned banks (intervened banks) – bringing Net Book Value (NAV) to Zero. AMCON he added bought 12,743 Eligible Bank Assets (EBAs) but has so far resolved about 4,000 EBAs while more than 8,000 EBAs are still outstanding just as it mapped out about 6,000 accounts to its Asset Management Partners (AMPs), which has significantly improved recoveries. However, 71 of the EBAs are currently under receivership.
On what he is doing ahead of the sunset date of AMCON, Kuru said, AMCON “Is already working with Ernst & Young as (Financial Advisers) to see what we need to do, how we need to work with the Nigerian Insurance Deposit Corporation (NDIC) and the Central Bank of Nigeria (CBN) to thinker things a little and then at certain point in time liaising with the National Assembly draw a line.
“My suggestion will be to put all the remaining debt in one vehicle and fling the vehicle to anybody or firm that wants to buy with considerable discount. At that stage maybe it would be wise to do that and then close AMCON. There are funds all over the world that are in search of such an opportunity. Then the contributions into the sinking fund from the banks, NDIC and CBN would over the period of two or three years depending on how the rates are adjusted be gradually cleared.”