Inflation May Push AMCON’s Debt To N7trn By 2024

The persistent increase in Nigeria’s inflation rate could push the debt owed by the Asset Management Corporation of Nigeria to the Central Bank of Nigeria to N7trn by 2024.

Currently, AMCON owes more than N4trn to the Central Bank of Nigeria from the acquisition of toxic assets in banks based on loans collected by debtors some of whom have become recalcitrant.

The Corporation had in recent times engaged the services of debt recovery agents to ensure that the loans are recovered and remitted into the coffers of government.

But the debtors have in the past engaged the services of legal experts who have been exploring judicial loopholes to delay the recovery of such debt.

With the rising inflation rate as well as the persistent delay in the payment of these debt, the Corporation expects that the loan could rise to N7trn by 2021.

Speaking at a Seminar for Justices of the Courts of Appeal, the Managing Director/Chief Executive Officer, AMCON, Mr Ahmed Kuru, reiterated the fact that AMCON currently has pilled-up legal issues in different courts with its so many loan defaulters.

The event was jointly organised by the National Judicial Institute with the full complement of management in attendance.

He said with obligors in the excess of N5trn, this would have negative effect on the national resources.

 
Kuru was however appreciative of the Nigerian judiciary for sustaining the AMCON Task Force in the four divisions of the Court of Appeal to ensure a fast track of AMCON appeals.

The AMCON CEO said no one can over flog the important role the judiciary plays in National developmg, adding that the judiciary remains vital to the success of AMCON.

The Administrator of the National Judicial Institute, Honourable Justice R.P.I Bosimo, (Rtd) called on the Nigerian judiciary to realise the need for speed in dispensing cases involving the AMCON and its recalcitrant obligors that come before their honourable courts.

She maintained that justice must be dispensed within the ambit of the law.

She said, “The role of the judiciary in the execution of AMCON mandate cannot be overemphasised.

“This is understandable considering that the distinguished bench is indispensable to the realisation of the enormous powers conferred on the Corporation by the AMCON Act.

 
“It is through these interactions that the judiciary will be sensitised on the complex role AMCON plays at ensuring the sustenance of the financial system stability in Nigeria.

“The level of financial stability currently enjoyed in the country is solely attributable to the role played by AMCON in offloading toxic portfolios from the balance sheets of banks thus enabling the banks to perform their intermediating role in the macro-economy.”

 
According to her, viewing the peculiarities, uniqueness and the unconventional nature of the AMCON regime, it is evident that the Corporation is bound to confront challenges and difficulties in its daily efforts to realise its mandate.

Justice Bozimo added that it was in order to assuage these challenges that the National Judicial Institute ensures that the judiciary especially the Hounourable Judges are sensitised and provided with updates that have to do with the AMCON regime at all times.

Furthermore, she said, “AMCON intervention in the economy at the time it was set up by the Federal Government ensured the integrity of banks and saved their employees from sudden and untimely disengagement.

” In other words, with the establishment of AMCON, Nigerian banks were saved from imminent collapse and their employees secured from retrenchment.”

In her remarks, the President of Nigeria’s Court of Appeal, Honourable Justice Monica Dongban-Mensem said now was the time for all agencies of government to ensure AMCON recovers its outstanding huge debt from its recalcitrant obligors who incidentally are exploring judicial technicalities to hold on.

She said, “Although Nigerian banks were restructured prior to the financial crisis through consolidation, the restructuring did not shield Nigerian banks from the effects of the crises.

“In fact, the crisis further exposed other lapses in the system that needed to be addressed in order to prevent total collapse.

“The Nigerian government responded by establishing AMCON to help in stimulating recovery of the Nigerian banking system through buying non-performing assets of troubled bank.”

She insisted that the judiciary must support AMCON to recover the debt.