Within the 60 to 90-day period set forth by the AMCON Act, Gbenga Alade, the managing director and chief executive officer of Asset Management Company of Nigeria (AMCON), has called on the judiciary to accelerate the adjudication of AMCON-related matters.
He maintained that the corporation’s ability to successfully collect billions of naira in unpaid bills depends on this.
According to Alade, AMCON still has a sizable loan portfolio of about N5 trillion after 14 years of operation, with the CBN responsible for a substantial amount of the company’s debt.
Alade stated that court assistance is essential in tackling AMCON’s massive backlog of more than 3,000 cases during a “Stakeholders Retreat with the Senate Committee on Banking, Insurance, and other Financial Institutions” over the weekend.
Over 3,000 cases are pending in courts across the nation, ranging from the Supreme Court to the court of first instance. We have kept up our efforts to strengthen our relationship with these courts’ leadership,” he stated.
“We hope that AMCON cases would be adjudicated within the time limit enshrined in the AMCON Act,” Alade said, reflecting the growing dependence of AMCON’s recovery operations on court efficiency.
He urged the senators to keep helping to educate government agencies about the dangers of doing business with debtors (contractors) who owe AMCON money.
Notwithstanding early difficulties, Alade claimed substantial recovery progress, with AMCON having so far recovered around N2.011 trillion. This amount includes, among other things, 44% cash recoveries and 56% from the sale of proprietary assets, clawbacks, and repurchases.
Since the company’s founding, it has successfully sold assets worth about N651 billion, helping to save jobs and save businesses all over Nigeria.
According to Alade, AMCON paid the Central Bank of Nigeria (CBN) N2,929 trillion between 2013 and 2023, which included AMCON recoveries and other Deposit Bank contributions to the Sinking Fund.
However, there are differing views on AMCON’s future, putting it at a crucial juncture. Given the ongoing difficulties in the financial industry, some support its winding down, while others say that it should continue to operate.
Alade was worried that if AMCON were to close too soon, non-performing loans may increase and bank failures might occur.
He remarked, “One wonders if any lessons were learned from activities of the past.” “AMCON decided to keep pursuing the recovery of the debts owed by a few people who would rather stay in court than pay off their debts,” he stated.
They think they will get away with it as the Corporation’s sunset date approaches, and the debt will be added to the country’s already high level of domestic debt. Since tax dollars may be used to pay off these obligations, we will not permit this to occur.
More than 70% of the Corporation’s total debt profile is really accounted for by just 350 obligors. He noted that some of these obligors nevertheless live opulent lives in society, fly private aircraft, and receive government contracts.
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The retreat’s theme gave senators a priceless chance to consider the crucial role AMCON has played in stabilizing the financial sector and to map out the future in light of its sunset clause, according to Senator Adetokunbo Abiru, chairman of the Senate Committee on Banking, Insurance, and other Financial Institutions.
The Corporation was created as an intervention agency, he said, to stop the banking industry’s march toward non-performing loans (NPLs), which have a negative effect on savers and the economy as a whole.
Since the acquisition of Eligible Banks Assets (EBA) restored much-needed liquidity to the banking system, he emphasized, “it is true that the establishment of AMCON has been largely successful in stabilizing the banking industry and reviving confidence in the financial sector.”
“There is no question that AMCON was founded during a period of significant upheaval, following the global financial crisis of 2008, to clean up the books of many failing banks,” he said, adding, “It can be said that as a result of AMCON’s interventions, thousands of jobs were saved as a number of banks were rescued from the brink of collapse.”
The fact that AMCON was not intended to be a long-term presence in the nation’s financial scene must be acknowledged, he said.
Although it states that a resolution of the National Assembly may prolong the present tenor, I am aware that the AMCON Amendment Act of 2021 extended AMCON’s existence for an additional five years. We are therefore at a critical juncture where we need to get past AMCON because it is almost difficult for the Corporation to recoup significant loans by 2026, when it is anticipated to wind down.
He emphasized, “Unfortunately, even after 14 years of operation, AMCON still has enormous loans in her portfolio totaling about N5 trillion, with a large amount of the AMCON debt owed to the CBN.”
