Going by the new AMCON Bill signed into law by President Muhammadu Buhari, one of the four deputy governors of the Central Bank of Nigeria (CBN) will soon be named to chair the Asset Management Corporation of Nigeria (AMCON) Board.
The Bill was passed by the eighth National Assembly.
A former National Legal Officer of the All Progressives Congress (APC), Dr. Muiz Banire sits on the AMCON board as the Chairman.
The Asset Management Corporation of Nigeria (Amendment) (No. 2) Act further amends the 2010 Act by increasing the powers of the Commission in enforcement of recovery of debt from persons owing legacy banks or seizure of property subject of loan obligation.
The CBN deputy governors are: Dr. Okwu Joseph Nnanna (Economic Policy Directorate); Mrs. Aishah N. Ahmad (Financial Systems Stability Directorate); Mr. Edward L. Adamu (Corporate Services Directorate) and Mr. Folashodun Adebisi Shonubi (Operations Directorate).
The signing into law of the AMCON (Amendment) Act, 2019 by the President is part of the new moves to get the corporation ready for its sunset around 2021.
The amended AMCON Act provides for a chairman who shall be a deputy governor in the CBN to be nominated by the apex bank.
AMCON was created as a tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the economy.
The Federal Government set up a task force to recover the over N5 trillion debt owed the AMCON. The task force will target the top 20 debtors out of the 12,537 obligors to the corporation.
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The corporation also said it would be exploring the Alternative Dispute Resolution (ADR) option that involves out-of-court settlement to recover the debts.
An economist and Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the amendment of the AMCON Act that now allows a deputy governor of the CBN to act as chairman of AMCON ‘will serve to weaken AMCON as an institution as it approaches its sunset clause’.
Speaking on AMCON operations and results achieved so far, a board member at Standard Bank Group, South Africa, Atedo Peterside, said that one third of the money that the Federal Government squandered on AMCON can resolve most of Nigeria’s social and economic problems including fixing the power sector.
Peterside who did not elaborate further on AMCON’s operation, spoke during ‘A Consultative Roundtable with the CBN governor’ tagged: ‘Going for Growth’ held in Lagos.
The need to tackle the rising bad loans in the banking industry, and save the sector from the imminent collapse that prompted the Federal Government to set up the Asset Management Corporation of Nigeria (AMCON) in 2010 with a 10-year mandate.
The corporation was established on July 19, 2010, when the AMCON Act was signed into law by former President Goodluck Jonathan.
It was given a mandate to acquire bad loans from banks, pay the banks and recover the loans from the debtors.
But eight years into its operation, it is being owed over N5 trillion by nearly 12,537 obligors.
Also, 62 high-profile debtors are owing AMCON N10 billion and above, going by the debt statistics obtained from the agency’s website.
The debt represents 40 per cent of the 12,537 obligors.
AMCON said that other 431 debtors, representing 37 per cent of the debtors, owe between N1 billion and N10 billion; 1,998 debtors, constituting 16 per cent of the total obligors, owe between N100 million and N1 billion while 10,046 debtors, representing seven per cent of the total obligors owe between N100 million and below bringing the total number of bad loans under AMCON management to 12,537.
AMCON’s Managing Director Ahmed Kuru announced that the corporation has so far recovered N1 trillion from the bad debtors, and the agency was doing everything within the ambit of the ambit of the law to recover the remaining debts. The N1 trillion recovery represents a meagre 18.51 per cent of the total debt portfolio.
Banks contribute 0.5 per cent of their total assets as at the date of their audited financial statements, annually to the AMCON Sinking Funds. There is also N50 billion CBN contribution to AMCON operation, spread across 10 years.