AMCON: FG Won’t Write-off N5trn Owed by Obligors – Minister

By Tony Obiechina
The has warned that it would not write off the debts owed to the Asset Management Corporation of Nigeria (AMCON), even as it has threatened to seize payments due to such debtors.
Minister of Finance, Mrs. Zainab Ahmed announced these measures at the inauguration of AMCON board in Abuja at the weekend.
“It must be emphasised that government would not deal with debtors that have failed to honour their obligations with AMCON. Payments due to some of these obligors will be put under lien until they enter into a resolution agreement with AMCON”, she warned.
The reason for this decision Zainab Ahmed said “is because AMCON’s debts sit on the government’s balance sheet with Central Bank of Nigeria (CBN).
The minister lamented that so far, “AMCON’S repayment of its indebtedness to the CBN was over N1trillion. AMCON’s total obligation to the CBN, is currently in excess of N5 trillion. It is evident that the cannot afford to write off this in the short term, hence, our moral obligation to pursue obligors and recover the debts owed.”
Zainab Ahmed said she has “been briefed on some of the challenges facing the Corporation, which include obligors resorting to all manner of tactics to avoid honouring their obligations. Whilst some are still enjoying government patronage, others are using the judiciary and adopting legal technicalities to stall recovery.”
The finance minister noted that AMCON has been able to recover over N1trillion since inception to 2018 year end. Out of the recovered sum, cash accounted for 60% while non-cash assets such as properties and equity securities accounted for the balance of 40%.
She added that “the Corporation has acquired over 12,000 non-performing loans worth approximately N3.7 trillion from 22 commercial banks; injected N22 Trillion as Financial Accommodation to 10 banks. The direct impact of that action is seen in the protection of about N3.66 trillion of depositors’ funds and approximately 14,000 jobs were saved.”
She explained that AMCON has two major roles which include bail out of banks through purchase of non-performing loans; and the second is to recover the loans from the obligors.
“It has successfully bailed out the banks; it is now at a stage where it must recover the debts. Failure to recover may result to serious consequences including recourse to tax payers’ money which must be avoided”, she added.
Ahmed pointed out that “for an organisation with sunset date, all hands must be on deck to provide the support required. Considering the huge portfolio of , no obligor must be allowed to go scot free no matter how highly placed.”
In his address, the of AMCON, Mohammed Kuru stated that “the most difficult thing is debt collection. When we took over we saw the body language of this government. We know that with the inauguration of this board, things will be more efficient. The turnaround time will be faster.”
He admitted that “it is not an easy task but the Act has provided for the situation that we are going through. We have been able to recover N1trillion, but we have more than N5trillion that is outstanding. If today AMCON disposes all that is in its possession, we may be able to recover maybe N1trillion, willing buyer-willing seller because the framework provides that it should be able to accommodate the N2.2trillion because most of the assets we are holding are from the banks and they were over valued. So if today I sell all the assets in my possession -if there is a willing buyer- I won’t be able to recover N1trillion.”
He appealed to the finance minister that “those obligers in our books must pay. Those that are doing big business with government must be made to settle either with AMCON or Inland Revenue because they ’t be owing and still want to do business with the government.”
In his speech, the chairman of the newly inaugurated AMCON board Mr. Muiz Banire assured the minister that board members and management of AMCON will live up to expectation and not fail in their assignment.
Banire also maintained that AMCON  in the discharge of its duties will continue to uphold the rule of law and endeavour to recover loans it is meant to.

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