It has been exactly ten years and a few days since July 19, 2010, when former Nigerian President, Goodluck Ebele Jonathan, signed the AMCON Act that established the Asset Management Company of Nigeria. As you may well know, AMCON’s main objectives were clear from the onset:
- Play an integral role in the recapitalisation of affected Nigerian banks.
- Provide an opportunity for Nigerian banks to sell off their Non-Performing Loans (NPLs).
- Free up valuable resources and enable Nigerian banks to focus on their core activities.
- Refocus the ideal lending ideology in Nigerian banks.
- And most importantly, prevent any possible financial crisis in the Nigerian financial sector.
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Whether or not AMCON has satisfactorily actualised these objectives remains a topic of passionate debate among Nigerians. But that is not the crux of the matter here. Instead, we are focusing on the questions of when and if AMCON will eventually get liquidated, and what happens next.
AMCON’s initial lifespan
The Asset Management Company of Nigeria had an initial lifespan of ten years, according to the statutes that established it. Going by that initial plan, the agency was scheduled to be wound down around this time of the year. However, a 2019 amendment of the AMCON Act did not clearly specify the next wind-down date for the agency. Therefore, it is unclear, at this point, if and when AMCON will be liquidated.
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So, what happens now?
Seeing as AMCON’s job is not fully done, a liquidation might never be an option in the meantime. Some experts’ views, which Nairametrics is privy to, have even estimated that a possible liquidation will not happen until sometime in 2023 or 2024. If and when liquidation does happen, the agency’s outstanding debts and its employees might become absorbed by the Central Bank of Nigeria and the Nigerian Deposit Insurance Company, NDIC. At the moment, there is more than N5 trillion worth of AMCON debt still outstanding.
“We now expect AMCON with its current strategies to wind down in 2023/2024. Where its loans and assets in AMCON have not been fully resolved by 2023/2024, we believe whatever is left of the loans, assets, and employees will be divided between the CBN and NDIC,” our source said.
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The backstory
Note that there have been numerous calls for the dissolution of AMCON. The International Monetary Fund (IMF) was the first to recommend that “a credible exit strategy for AMCON is devised, in line with the one-off character of its operations.” Since then, the likes of Ernst & Young, the Central Bank of Nigeria, and the Nigerian Deposit Insurance Corporation have recommended that AMCON be scrapped.
In the meantime, Ahmed Kuru’s tenure might be over soon
The current Chief Executive Officer of AMCON, Ahmed Kuru, might be getting ready to step aside come August 2020, unless his tenure gets renewed. Recall that he took over from Mustafa Obi, AMCON’s pioneer CEO, in October 2015. Obi had served for exactly five years as CEO of AMCON prior to his replacement.