AMCON seeks Senate’s mediation in recovering N5 trillion debt

The Asset Management Corporation of Nigeria (AMCON) is looking up to the Nigerian Senate for a helping hand in recovering as much as N5 trillion in problem loans as the agency approaches the close of operations by 2026.

AMCON was set up in 2010 to help purge banks of toxic assets by acquiring the loans and ultimately recovering them.

“If you do your maths, out of the N4.1 trillion total disbursement to AMCON, I mean a total of N4.1 trillion for asset purchase and financial accommodation to the bank, AMCON has paid about N3 trillion,” AMCON’s Chief Executive Gbenga Falade told the Senate Committee on Banking and Finance in Lagos on Saturday.

The organisation is asking the legislators to mediate in getting debtors to pay up after a refusal by many obligors to clear their debt blew up the interest on the loans.

In turn, that bloated what AMCON pays back to the Central Bank of Nigeria, which provided the funds it needed for running its operations fourteen years ago when the initiative took off.

“If you do a rough maths, you will say. Oh, AMCON is almost there. But we are not almost there. Because when you do interest, you know I mean capitalisation on that amount, AMCON today is still owing close to N3 trillion to be paid to CBN,” the AMCON boss said.

For a start, the agency bought eligible assets worth N3.8 trillion from 22 lenders at a purchase price of N1.8 trillion, according to him.

It capitalised three banks and went on to give five others access to financial accommodation so they could stabilise, all to the tune of N2.3 trillion.

Compared to the N4.1 trillion it has disbursed to date, AMCON has retrieved N2 trillion from debtors: 44 per cent through cash recovery, 56 per cent through repurchases and other means.

AMCON’s debtors have been “hiding under the technicality of the law” to escape repayment, Mr Falade remarked, with nearly three thousand cases yet to be resolved, some of which have dragged on for fifteen years.

“I am aware that the AMCON Amendment Act of 2021 extended the life of AMCON for another 5 years although it provides that the current tenor may be extended by a resolution of the National Assembly,” said Tokunbo Abiru, who chairs the Senate committee.

“So we now stand at a pivotal moment where we must transition beyond AMCON as it is near impossible for the Corporation to recover substantial loans by 2026 when it is expected to wind down.”

The corporation is stepping up the effort by turning to the judiciary for intervention, saying it will achieve that by arranging a similar retreat with judges.

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The National Assembly has amended the AMCON Act twice since inception essentially to empower the agency more to achieve its mandate.

“They amended the act, gave AMCON so much power,” Mr Falade said. “But the question is the judiciary is not applying that yet.”