Thursday, November 21, 2019
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AMCON and Bad Debts

Financial institutions in Nigeria are being owed a staggering N5 trillion, about 67 per cent of which is being owed by 20 individuals and entities. This, by all standards, is galling.Disturbed by this, the federal government recently set upa special task force with members drawn from the Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU), the Independent Corrupt Practices and other related offences Commission (ICPC) and the Permanent Secretaries of the Justice Ministry, with a mandate to recover the outstanding amounts. The Asset Management Corporation of Nigeria (AMCON) was created by the federal government in 2010 as a special purpose agency to take over failed banks, non-performing loans and other toxic assets to ensure that both depositors’ funds and the workers’ jobs are protected. The agency was meant to be a stopgap with a life span of ten years.
AMCON, despite the noble idea behind its formation, appeared toothless and has not recorded much success in line with its mandate. Nearly 10 years after, going after the debtors has proved more challenging than those who set up the agency may have anticipated. Lenders and financial regulators have over time been frustrated over how to effectively go after high profile debtors, recover funds, and checkmate their collaborators, many of who are top banking industry executives.Nigeria’s banking system and the economy have suffered serial rape perpetuated by greedy businessmen working in cahoots with bank insiders over the years as they take loans they never intend to pay back. Sorting out bad debts and prosecuting those behind them has remained a challenge even when banks and banker’s jobs are saved by the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN), as was the case of the defunct Afribank, Bank PHB and Spring Bank, when the regulator created bridge banks, Mainstreet, Keystone and Enterprise, for seamless take over of the operations of the failed banks. It is in view of this that we commend President Muhammadu Buhari for recently assenting to the amendment of the AMCON Act 2010, by increasing the powers of the Commission in enforcement of recovery of debts from persons owing legacy banks or seizure of property subject of loan obligation. The amendment also empowers AMCON to, among others, place any bank account or any other account comparable to a bank account of a debtor of an eligible financial institution under surveillance, obtain access to any computer system component, electronic or mechanical device of any debtor with a view to establishing the location of funds belonging to the debtor, and obtain information in respect of any private account together with all bank financial and commercial records of any debtor of any eligible financial institution, banking secrecy, and the protection of customer confidentiality is not a ground for the denial of the power of the Corporation under this section and also makes it mandatory for AMCON to, despite the convention of confidentiality of banking, business and contracting relations, furnish the Federal Government, Ministries, Departments and Agencies with a list of recalcitrant debtors and then impose an obligation to seek clearance on the Federal Government, Ministries, Departments and Agencies when the Federal Government, any Ministry, Department or Agency proposes to contract with, or pay, debtors on the list furnished by the Corporation.It is therefore laudable that the reinvigorated AMCON has hit the ground running and the Federal High Court in Lagos, a few days back, ordered AMCON and United Bank for Africa (UBA) to take over an Ikoyi, Lagos, property of former governor of Cross River State, Donald Duke, over an alleged debt of N537,334,360.77, pursuant to an ex parte application, marked, FHC/L/CS/1373/2019, taken before the judge by AMCON and UBA. We urge AMCON to, in line with the new powers conferred on it, do more to recover this staggering debt. Despite the laudability of the latest move, government must also work towards extending the life of AMCON which is billed to end by 2020. 

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