The Chairman of the Senate Committee on Banking, Insurance, and other Financial Institutions, Senator Adetokunbo Abiru, has inaugurated a panel to help recover loans owed the Asset Management Corporation of Nigeria.
Senator Abiru revealed this development in his speech at the 2024 Senate Committee on Banking’s retreat with AMCON over the weekend.
He vowed that the set up panel will do its job thoroughly.
According to him, the theme of the retreat also provided an invaluable opportunity for senators to reflect on the critical role that AMCON has played in stabilising the financial sector and to chart the path forward in view of its sunset clause.
He noted that the Corporation was established as an intervention agency to halt the drift caused by Non-Performing Loans in the banking industry with its adverse impact on savers and the entire economy.
Abiru said: “Admittedly, the setting up of AMCON has succeeded, to a large extent, in not only stabilizing the banking industry given that the purchase of Eligible Banks Assets (EBA) reinjected the much-needed liquidity into the banking system, but also helped in restoring confidence in the financial sector.
“Without any doubt, AMCON was established at a time of considerable turmoil, in the wake of the global financial crisis of 2008, to clean up the books of many ailing banks.
“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.”
Senator Abiru noted that they must accept the reality that AMCON was not designed to be a permanent fixture in the country’s financial landscape.
He added: “I am aware that the AMCON Amendment Act of 2021 extended the life of AMCON for another five years although it provides that the current tenor may be extended by a resolution of the National Assembly.
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“So, we now stand at a pivotal moment where we must transition beyond AMCON as it is nearly impossible for the Corporation to recover substantial loans by 2026 when it is expected to wind down.
“Regrettably, despite 14 years of its existence, AMCON still carries massive loans in her portfolio put at circa N5 trillion with a significant portion of the AMCON debt due to the CBN.
“So, I expect that at this retreat, we should come up with more effective options for dealing with outstanding loans beyond the strategies already adopted, just like the Korea Asset Management Company (KAMCO).
“It goes without saying that a major challenge remains how to recover the taxpayers’ money used to purchase the EBAs so they can be channelled to critical areas such as education, health, and provision of infrastructure.
“This is against the backdrop of the fact that many businesses in Nigeria are currently battling economic headwinds, which make debt recovery efforts more difficult now than ever before.”
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