A legal consultant and Senior Partner at a law firm, Muyiwa Balogun expects the debt of the Asset Management Corporation of Nigeria (AMCON) to rise from N5 trillion to N6.6 trillion in 2024. Laying further credence to this statement, he disclosed that while AMCON was battling with N1.7 trillion of Assets Under Litigation, it still owed the Central Bank N4.5 trillion.
Balogun urged AMCON and its Asset Management Partners (AMP), as well as the Inter-Agency Presidential Committee set up by the Federal Government to use the 2019 Amended AMCON Act, signed into law by President Muhammadu Buhari to recover the outstanding debts as soon as possible. He noted that Nigeria’s economy would be seriously affected if debts are not recovered before the sunset period.
The Legal Consultant said he was pleased with what he termed ‘key pillars of the 2019 amendment’ which will accelerate the process of tracing and tracking debtors’ hidden funds while checkmating any debtor that will seek to exploit legal technicalities to frustrate recovery.
What you should know: Chief Executive Officer, AMCON, Ahmed Kuru said the debtors had resulted to different means to stretch AMCON to the sunset period. He vowed to recover the debt within the limited time he was given.
Why this matters: There are gross implications if the debt is not recovered. According to recent Nairametrics articles, AMCON noted that Nigeria’s financial sector might be heading towards another era of high non-performing loans which will, in turn, affect the economy. Also, the debt would eventually become the burden of the Federal Government and by extension taxpayers’ if nothing is done about debt.
The backstory: Over 350 Nigerians are said to be responsible for more than 80% of the N5 trillion debt profile of AMCON. The huge debts have lingered for several years.
- AMCON was set up by the Federal Government in 2010 to acquire non-performing loans from banks in order to ensure the viability of the country’s financial sector.
- FG, through the operation of the Central Bank of Nigeria, conceptualized the idea for the establishment of a body that would prevent financial crisis in the country.
- In October 2018, the corporation published about 20 names of corporations and agencies who hugely contributed to the debt.
- AMCON also threatened to publish the full list and released a documentary on prominent Nigerians who are still owing the corporation.
- President Muhammadu Buhari assented to a new Act that gives AMCON more power to enforce recovery of debt from prominent Nigerians and corporate organisations.
- Recently, the Federal Government set up an inter-agency committee for the purpose of recovering the N5 trillion debt owed the Asset Management Corporation of Nigeria (AMCON)