A budget defence session by AMCON turned dramatic as senators took turns to lambast the debt recovery agency and threatened to scrap it
There was a dramatic turm of events on Wednesday when senators disagreed on the performance of the Asset Management Corporation of Nigeria (AMCON) with some of the legislators calling for its dissolution.
This was as the Managing Director of the agency, Ahmed Kuru, failed to convincingly explain inability of the agency to recover debts up to the tune of N5 trllion but yet incurred operational losses during the current fiscal year.
Addressing the senate committee on banking, insurance and other financial institutions during the 2024 budget defence of AMCON, Mr. Kuru said the agency had been able to recover about N648bn out of a total liability of N5trn as of 20th September, 2023.
Dissatisfied with such performance, some senators asked whether the National Assembly would do well to scrap the agency instead of continually funding its activities.
Senator Sani Musa (APC, Niger East), questioned why AMCON did not pursue loan recovery efforts with sufficient vigour despite its massive liabilities, saying “most of the loans were owed by individual companies which were never sanctioned and at the end of the day, the same company would go back to buy back their assets that AMCON had hitherto taken over. Are we going to continue like this?
“It is not only about defending budget, it is about seeing the effect of the Appropriation, we need to know whether it is working. Or are we just creating a job for those we can protect? Will it not be better to scrap AMCON since it seems to have lost its statutory mandate?”
In a similar vein, Senator Jimoh Ibrahim (APC, Ondo South) expressed concern over the significant losses incurred by the assets recovery agency during the previous fiscal year.
Ibrahim said: “Your total comprehensive profit and loss, and it came into a loss of N145bn. This calls for concern. Your net operating profit and loss is N126bn. What is responsible for all these big losses. You are created to collect bank loans from them. Even if you’re now regulators to the debtors, why are you incurring losses. Your balance sheet is not looking so good. Again, why are you buying cash-colateralised loans?”
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However, the committee chairman, Senator Tokunbo Abiru (APC, Lagos East), attempted to defend the agency’s submissions, but some members did not agree, forcing the panel had to go into a closed session.
About half an hour later, the committee resumed from the closed door and Abiru briefed journalists on the conclusions of the executive session. He said: “The committee has agreed that there is the need for a strong financial system stability hence agencies like AMCON is still desirable.
“We also believe that the role of AMCON is further underscored by the fact that it was set up using a model that it would help us to tidy up the challenges that we had in the financial system in the past. The only challenge that we had today is that we need to have a definite time that all the obligations that are hanging on the throat of AMCON must be redeemed.
“The conclusion is that we will continue to work with AMCON and other agencies to fashion out a model that would make AMCON openly wound down it’s obligation at the possible shortest time. There is no society that does not have AMCON in one form or the other. The only way we can resolve financial stability is through the creation of an entity like this and we need to ensure it’s success.”
