AMCON urges judiciary to facilitate N5trn debt recovery

Gbenga Alade, the managing director and chief executive officer of Asset Management Company of Nigeria (AMCON), has called on the judiciary to accelerate the resolution of matters pertaining to AMCON within the 60–90 day period allotted under the AMCON Act.

He maintained that this is essential to the company’s ability to collect billions of naira in unpaid debts.
Even after 14 years of operation, AMCON still has a sizable loan portfolio of about N5 trillion, with the CBN responsible for a substantial amount of the company’s debt, according to Alade.

“Judicial support is crucial in addressing AMCON’s extensive backlog of over 3,000 cases,” Alade said during a “Stakeholders Retreat with the Senate Committee on Banking, Insurance, and other Financial Institutions” over the weekend.

From the court of first instance to the Supreme Court, we have over 3,000 cases pending in different courts around the nation. Our relationship with the leadership of these courts has been deeper over time,” he stated.

“We hope that AMCON cases would be adjudicated within the time limit enshrined in the AMCON Act,” Alade said, describing how AMCON’s recovery operations are becoming more and more dependent on court efficiency.
He pleaded with the senators to keep helping increase government agencies’ knowledge of the dangers of doing business with debtors (contractors) who owe AMCON money.

Alade stated that despite early difficulties, recoveries had advanced significantly, with AMCON having so far collected almost N2.011 trillion. Among other things, this number includes 44% in cash recoveries and 56% from the sale of proprietary assets, clawbacks, and repurchases.

Since its founding, the company has successfully sold assets worth about N651 billion, helping to save jobs and save businesses all over Nigeria.
Alade went on to say that between 2013 and 2023, AMCON paid N2,929 trillion to the Central Bank of Nigeria (CBN), which included AMCON recoveries and other Deposit Bank contributions to the Sinking Fund.

There are differing views on AMCON’s future, though, and the organization is at a pivotal point. Given the ongoing difficulties in the financial sector, some call for its winding down, while others support its continued existence.
Alade voiced worries that an early AMCON shutdown may result in a rise in non-performing loans and possible bank failures.

“I wonder if there were any lessons learned from past activities,” he remarked. According to him, AMCON decided to keep pursuing the recovery of debts due by a small number of people who would rather stay in court than pay off their bills.

They think that as the Corporation’s sunset date approaches, they will get away with it and the debt will be added to the country’s already high level of domestic debt. Since tax payers’ money might be used to pay off these obligations, we won’t let this happen.

In actuality, only over 350 obligors account for more than 70% of the Corporation’s total debt profile. He noted that some of these obligors still have government contracts, fly private jets, and lead opulent lives.

The retreat’s theme, according to Senator Adetokunbo Abiru, chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, 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.

He pointed out that the Corporation was created as an intervention organization to stop the banking sector’s drift toward non-performing loans (NPLs), which have a negative effect on depositors and the economy as a whole.

“It is true that the establishment of AMCON has been largely successful in stabilizing the banking sector, as the acquisition of Eligible Banks Assets (EBA) restored much-needed liquidity to the banking system and contributed to the restoration of confidence in the financial sector,” he emphasized.

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“Without a 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,” he said, adding that “numbers of banks were rescued from the brink of collapse as a result of AMCON’s interventions, saving thousands of jobs.”

He pointed out that they have to acknowledge the fact that AMCON was not intended to be a long-term presence in the nation’s financial system.

Although the AMCON Amendment Act of 2021 stipulates that a resolution of the National Assembly may prolong the present tenor, I am aware that it extended AMCON’s existence for an additional five years. Since it is almost difficult for the Corporation to recoup significant loans by 2026, when it is anticipated to wind down, we are at a critical juncture when we must move past AMCON.

“Unfortunately, even after 14 years of operation, AMCON still has a sizable loan portfolio worth about N5 trillion, with the CBN responsible for a sizable amount of AMCON’s debt,” he emphasized.