BY VICTORIA ONU, ABUJA
Out of the N4.4trn bad debt that the Asset Management Corporation of Nigeria is pursuing to recover, about N3.65trn, which is 83 per cent of the debt portfolio, is owed by just 350 obligors.
Out of these 350 obligors, about 244 of them are in various courts with collateral coverage of only 16 per cent of the total current exposure.
AMCON Executive Director of Operations, Aminu Ismail, said this at an interactive session organized by Legal Academy for Land Registry Officials, Corporate Affairs Commission personnel, AMCON and other stakeholders of the Federal Government
Ismail, who represented Ahmed Kuru, AMCON’s Managing Director/CEO at the interactive session, reminded participants that AMCON’s mandate remains a national assignment, which requires the collaboration of all agencies of the government.
He said this high-level collaboration is needed because AMCON’s total current exposure on all Eligible Bank Assets presently stands at N4.4trn.
He called on all agencies of the federal government and all stakeholders to join its debt recovery drive to guide against the huge opportunity cost of not recovering its huge total current exposure.
This colossal outstanding going by the 2021 budget estimate rivals the entire budget of the 36 states of the Federal Republic of Nigeria.
The N4.4trn, which is owed AMCON, is bigger than the entire 2021 capital expenditure budget of the Federal Government of Nigeria, which stands at N3.85trn.
It is also bigger than the N3.12trn for total foreign debt service for 2021 and personnel cost of N3.7trn.
The N4.4trn, if recovered, would be enough to complete the revival of the moribund Ajaokuta Steel Company and construction of many more of such projects.
“Justice Dimgba said AMCON needs to do whatever it takes within the ambit of the law to ensure that these individuals who are holding the collective commonwealth of Nigeria are made to return them to the government
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The development of the iron and steel sector as well as the electricity sector are essential ingredients to industrialisation in any country and the debt owed AMCON can do a lot in improving electricity generation and distribution as well as revival of the challenged iron and steel sector.
Similarly, the huge debt if recovered would be enough to capitalize over two million Micro Businesses with N2m cash injection each or 200,000 Small and Medium Enterprises with N20m per SME.
With all these facts and its negative effect to the economy, Justice Nnamdi Dimgba of the Federal High Court Awka Division who also spoke at the event as a ‘bad bank,’ AMCON has current huge outstanding debt of over N4.4trn owed it by a few individuals that destroyed a good number of financial institutions through huge borrowings with no intention to pay back the loans.
Justice Dimgba said AMCON needs to do whatever it takes within the ambit of the law to ensure that these individuals who are holding the collective commonwealth of Nigeria are made to return them to the government.
According to him, supporting AMCON, which is what those that created the agency is doing and had done with the latest amendment of the AMCON Act is the only way to compel repayment.
This move, the legal luminary argued, is because AMCON is a ‘Special Animal’ created by the Federal Government of Nigeria to deal with special problems in the country, which started with the global financial meltdown that affected many economies the world over, including Nigeria.
The bad loans were sold to AMCON when it was created in 2010. AMCON upon taking over the bad debts recapitalised a good number of the affected financial institutions and stabilised the financial sector.
Having completed that, AMCON then has the mandate to go after the obligors to recover the debts.
Aside from the banks that were destroyed by these obligors, other sectors of the Nigerian economy such as the oil and gas establishments, manufacturing firms, airlines, real estate and construction companies, maritime firms and power generating organisations, insurance companies just to mention a few, were all affected.
But as AMCON intensifies efforts to recover the huge outstanding debts, these obligors have perfected the act of hiding under all sorts of technical lacunas in the AMCON Act to frustrate recovery.
On the other hand, the Federal Government through the National Assembly carried out some amendments in the Act establishing AMCON, which gives AMCON some additional powers that would hasten its recovery mandate.
Only recently, President Buhari again signed into law the Asset Management Corporation of Nigeria (Amendment) Act, amending the AMCON Act No.4, 2010.
The AMCON Act among other adjustments provides for the extension of the tenor of the Resolution Cost Fund and grants access to the Special Tribunal established by the Banks and other Financial Institutions Act 2020.
The Act confers on AMCON the power to among others “to take possession, manage, foreclose or sell, transfer, assign or otherwise deal with the asset or property used as security for Eligible Bank Assets (EBAs), and related matters.’’
This latest development has also attracted criticisms, especially from the quarters of the obligors and those sympathetic to them.
