As its debt portfolio continues to rise, the Asset Management Corporation of Nigeria (AMCON) has called on the National Assembly to support its efforts in recovering the debt of over N5 trillion from obligors.
According to the Corporation, the 9th Senate could pile pressure on some of the obligors through its Committee on Banking, Insurance and Other Financial Institutions, under the chairmanship of Senator Uba Sani.
Managing Director and Chief Executive Officer, AMCON, Ahmed Lawan Kuru, made the call at the weekend when he led the management of the Corporation to appear before a technical session of the Senate Committee on Banking Insurance and other Financial Institutions in Abuja.
The committee met to review the impact of COVID-19 on AMCON’s policies and processes, with a view to repositioning it for optimal performance amid the pandemic.
According to Kuru, the collaboration was vital to recovering the huge outstanding debt, as it would have positive impact on Nigeria’s economy, especially with the challenge of the COVID-19 pandemic. He said although the Corporation had, with the aid of the National Assembly, sought to address some of the challenges in the 2019 Amendment Act, the Senate needed to do more to support AMCON’s recovery, as some of the top obligors hide under legal technicalities to tie AMCON in courts.
He noted that some of the obligors were exploring the loopholes in the Act prior to amendment, making the Corporation to witness a slow judicial process including undue adjournment, lack of hearing date, and adequate understanding of the AMCON Act, among other issues.
He said, notwithstanding the pandemic, at the end of Third Quarter (Q3) 2020, the Corporation’s assets under management (AUM) amounted to about N136.73 billion, while it has about N112.03 billion worth of proprietary assets.
His words: “AMCON, one of the institutions of the government saddled with the responsibility of revitalising Nigeria’s economy is not immune to this monumental global disaster. The pandemic has impacted negatively on the various sectors of our economy, particularly the sectors, which AMCON is substantially exposed to, like aviation, oil and gas, manufacturing, and retail sectors.
“The continuous rise in inflation and Naira depreciation has also affected the purchasing power of the public thereby affecting obligor’s capacity to repay.”
Noting the untoward hardship caused by COVID-19 on many businesses and the economy at large, Kuru said the Corporation has begun considerations to grant moratorium to deserving obligors that had shown commitment and seriousness towards resolving their indebtedness.
In his remarks, the Chairman of the Committee, Senator Uba Sani, said the Committee and AMCON had identified the strategies being employed by debtors to stall the repayment of loans, including the dragging of court cases for many years, noting that AMCON has remained at the receiving end of the orchestrated acts of economic sabotage.
He noted that the engagement with AMCON provided a window of opportunity for the Committee to brainstorm on key issues and concerns in maintaining the continued stability of the financial sector, particularly the banking industry.
Meanwhile, he said the engagement also addressed the continued rise of Non-performing Loans (NPLs) as well the challenges of AMCON, notably policies and procedures, implementation strategies, and assets recovery in the heat of the COVID-19 pandemic.He assured that the 9th Senate would strongly consider all recommendations, which if strengthened, will further enhance the efforts of AMCON, thereby propelling the nation’s economic revitalisation.