Federal House of Representatives Committee Chairman on Banking and Currency, Hon. Victor Nwokolo has assured Nigerians that the 9th National Assembly would take all necessary measures that would support the Asset Management Corporation of Nigeria (AMCON) in realizing the huge outstanding debt of over N5.4trillioon owed it by obligors before its sunset.
Recall that AMCON with the assistance of the 8th National Assembly successfully amended the AMCON Act, which President Muhammadu Buhari signed into law earlier in the year. The amended Act further provided AMCON with additional powers to deal with the obligors.
Since government is a continuum, Nwokolo who was addressing members of the House Committee on Banking and Currency at retreat, which began in Lagos on Wednesday affirmed that the National Assembly through the committee, which has oversight mandate over AMCON would work to ensure that AMCON not only performs its function satisfactorily, but ensures that the corporation delivers on its expected mandate given that AMCON is a creation of the parliament in 2010.
While commending the previous assembly, the management of AMCON under the leadership of Mr Ahmed Lawan Kuru, its Managing Director/Chief Executive Officer, and the executive arm of government for amending the AMCON Act, the Chairman said the National Assembly will indeed continue to amend the Act until the federal government achieves that target for which AMCON was created in the first place, which is to stabilize the financial sector.
Given that the AMCON Act has been amended and already signed into law by President Buhari, Nwokolo said the national assembly will continue to strengthen the laws of the country on enforcement. He said enforcement has become critical given the tactics of the debtors, which has constrained AMCON from achieving optimum results especially since public funds were used to buy these loans that helped prevent systemic collapse of the banking sector in Nigeria at the time AMCON was created in 2010.
AMCON Managing Director/CEO, who challenged the lawmakers to consolidate on the gains of the previous national assembly said it is in the interest of the Nigerian economy to recover the debt because it was not established as a charity organisation.
He said AMCON raised its funds through: a. Share Capital of N10 billion contributed equally by the Ministry of Finance (“MOF”) and Central Bank of Nigeria (CBN); b. 6% Bonds issued for a discounted value of N4.042tn (face value of N5.6tn) for the acquisition of Non=Performing Loans (NPLs) and the recapitalization of Eligible Financial Institutions (EFIs) and c. N500bn Debenture from the CBN at 3% annual interest rate, payable 2021.
Kuru said AMCON purchased 12,743 NPLs or EBAs worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs) for a purchase price of N1.8 trillion. The purchased are covered by various collaterals.