The Asset Management Corporation of Nigeria (AMCON) can be said to have acquitted itself creditably in the discharge of its duties in the country. When the AMCON Bill was signed into law on July 9, 2010 as an Act to establish the Asset Management Corporation of Nigeria for the purpose of efficiently resolving the non-performing loan assets of Banks in Nigeria and for related matters, many economic experts did not give it a chance. However, looking back at the years, it cannot be disputed that AMCON has played a key role in stabilizing the Nigerian financial sector.
The corporation which was dubbed a child of circumstance, established to ensure banks remained a going concern, no doubt has helped to salvage many banks that would have gone under, thereby ensuring that depositors’ fund did not go into the thin air and jobs were not lost. It has been argued that its intervention in the banking sector saved 90 per cent of employees that would have lost their jobs in the banking sector.
An example of the corporation’s daring acts which has reassured the banking public and boosted the banks’ confidence, it recently released the list of debtors it claimed failed to negotiate successfully with the corporation, , in order to save some banks that were neck deep in non-performing loans.
The managing director and chief executive of AMCON, Ahmed Kuru, had in July promised to publish the list of delinquent debtors and directors who have failed to reach or refused to reach settlement resolution with the corporation.
Mr Kuru said after failed negotiations, AMCON would name, shame and embark on take-over of properties of delinquent debtors.
AMCON in its release said it published the names pursuant to its statutory mandate and in compliance with a CBN directive, having exhausted all avenues of ensuring that the debtors propose acceptable resolution terms.
“Nevertheless, the Corporation is still open to amicable resolution of these debt within a reasonable time, failing which it shall continue to exercise all powers as provided by law to recover the debts,” Kuru said.
Despite its giant strides, AMCON is still faced with challenges. One of its major challenges is overcoming obstacles of judicial process in recovering debts, particularly when banks become solvent. Perhaps that explains why it embarked on capacity development of some judges recently in Abuja.
Speaking during the event, Chief Judge of the Federal High Court, Justice Adamu Kafarati, averred that attempt by the AMCON to recover over N5.4 trillion bad debts would be impossible without judiciary support.
Mr Kafarati was addressing federal High Court Judges at an interactive session between the National Judicial Institute NJI, AMCON and federal high court judges in Abuja.
He said there was a need for judges in the country to support the recovery efforts by AMCON considering that the corporation was established as a central element of government’s response to the financial crisis in the country.
He noted that AMCON’s assignment to recover the huge amount was a national assignment deserving of the support of all interest groups, especially the judiciary.
“That AMCON is coming to save the banks in Nigeria cannot be over-emphasised. So the corporation must be supported through firm judicial processes to recover the outstanding debts since it also borrowed money to rescue the banks,” the official said.
Highlighting the crisis that could have hit the Nigerian economy if the government did not establish AMCON at the time it did, Mr Kafarati said banks are drivers of the economy, ”as they supply its oxygen.”
“My Lords, during the 2008/2009 financial crisis in Nigeria (partly triggered by the global financial crisis, and partly by domestic activities), the government intervened to support the banks by bailing them out in order to allow the financial system to continue functioning.
“In the absence of government intervention in the banks through AMCON, a number of banks in the country would have failed, thereby inhibiting banks from playing their crucial roles in the economy, like payment for services to households and companies extension of credits, savings accounts and financial insurance, among others.”
Mr Kafarati said an interruption to the critical service provided by the banks, and the likely loss of confidence in the system that could have followed, would have resulted in widespread disruption and ultimate collapse of the country’s financial system.
He affirmed that the creation of AMCON in 2010 and the injection of capital into the ailing banks in consideration for equity was the most important step by the government towards resolving the problem of non-performing loans NPLs in banks.
Mr. Kafarati stressed that to recover every outstanding debt, the judiciary must collaborate with AMCON in the purchase of the NPLs, to maximise the value of asset recoveries and minimize costs to taxpayers.
Also AMCON MD Kuru at the occasion noted the challenges the corporation was facing in the recovery of the outstanding debt of AMCON.
He told the judges it was clear AMCON cannot go very far without the support of the courts since the obligors usually deliberately raise technicalities in courts to elongate and delay their cases with AMCON.
As part of its renewed strategy for recovering debts, he said AMCON decided earlier in the year to refocus its strategy by shifting gears from restructuring towards enforcement. Out of the 191,766 cases pending at the federal high court, he said more than 3,000 are related to AMCON alone.
Kuru, an apostle of capacity development as a way of shaping the nation’s economy has reiterated the need for the government and institutions at all levels to pay more attention to human capital development, which he described as the key to the paradigm shift the country is clamoring for.
As a special guest of honour at the 2018 edition of the annual Presidential Dinner for the graduating Senior Executive Course 40 Participants of the National Institute for Policy and Strategic Studies, organized by the Alumni Association of the National Institute AANI, he argued that no country in the world has been able to attain change without a strategy that supports consistent investment in the development of its human capital.
He said, “It is not easy to have a paradigm shift in two, three or even eight years the way most of us are demanding for change in this country. Institutions and governments at all levels must ensure consistent and sustained investment in the development of human capital, which in turn will gradually change the narratives of development in our dear country. I believe the National Institute for Policy and Strategic Studies is strategically positioned to achieve this because of the caliber of people that are privileged to attend the course.
Kuru, has also pledged the full support of AMCON to its partners in their bid to recover the corporation’s portfolio. A statement by AMCON spokesperson, Jude Nwauzor, on recently said the AMCON boss made the submission at a programme organized by the corporation and its partners in Lagos.
Mr Kuru said the corporation would strengthen its Asset Management Partners AMPs to ensure recovery of 20 per cent or N740 billion of the total Eligible Bank Assets EBAs of AMCON portfolio of N3.7 trillion that are out there in the hands of obligors.
AMPs are firms AMCON engaged in 2016 to complement its recovery efforts as part of its renewed strategy to resolve some 6,000 accounts within its portfolio of accounts.
While declaring the 2-day event open, the AMCON boss said the corporation placed equal importance on the ability of the partners to recover the outsourced accounts because their efforts count towards the achievement of AMCON’s core mandate.
Mr Kuru who was represented at the event by Aliyu Kalgo, the Group Head of Enforcements at AMCON, also urged the APMs to discharge their assignments within the defined rules of engagement as stipulated by the AMCON Act and as seasoned professionals.
It would be recalled that the performance of AMCON has not gone unnoticed as Mr. Ahmed Kuru recently emerged winner of African Best Rated CEO of The Year at the second edition of the National Development Forum NDF/award ceremony organized by African Development Magazine.
Explaining the criteria for the selection of Kuru at the event, Mr. Mr. Ayo Ilesanmi, the organizer of the award ceremony and Publisher/Chief Executive Officer of the media house stated that the AMCON boss was adjudged winner by the panel of judges after a careful evaluation of the difficult assignment he does at AMCON and the fact that he goes about it in the way that supports the ongoing fight for corruption in the country.