AMCON’s New Powers

Asset Management Corporation of Nigeria (AMCON)

President Muhammadu Buhari has signed a new law that grants additional powers to the Asset Management Corporation of Nigeria (AMCON). The new law – AMCON (Amendment Act, 2019) – empowers the agency to access the financial details of debtors. The agency can now place bank accounts of debtors under surveillance. The new law empowers AMCON to by-pass any legal or procedural restriction, specifically those protecting banking details of debtors, so that the debt-mopping agency could gain access to such records. AMCON can now establish the location of debtors’ funds at home or in the Diaspora. The law also empowers AMCON to furnish government Ministries, Departments and Agencies (MDAs) with a list of debtors, and advise government to deny contract awards to such defaulting companies and persons.

The Special Adviser to the President on National Assembly Matters, Senator Ita Enang, who announced that Buhari have appended his signature to the law, explained that “It (the Act) empowers AMCON to place any bank account or any other account comparable to a bank account of a debtor of an eligible financial institution under surveillance; obtain access to any computer system component, electronic or mechanical device of any debtor with a view to establishing the location of funds belonging to the debtor; and obtain information in respect of any private account together with all bank financial and commercial records of any debtor of any eligible financial institution.”

As a complement to the new law, Vice President Yemi Osinbajo has set up a task force to facilitate ways and means to recover over N5 trillion debts owed AMCON. The agencies are the Economic and Financial Crimes Commission (EFCC), Nigeria Financial Intelligence Unit (NFIU), the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and the Federal Ministry of Justice.

AMCON is a federal government agency established in 2010 by an Act of the National Assembly with a dual mandate. Primarily, it is to take over non-performing loans of banks and work towards the resolution of same. It is to deploy all assets associated with such loans to economically profitable ventures. Secondly, AMCON is expected to, in the course of resolving the non-performing loans, buy up failed banks and put them back in business on a sound footing. Its mandate remains essentially that of a revivalist. They are to take the burden of non-performing loans and liabilities from the shoulder of banks and liaise with debtors to pay up.

In the course of verifying the stock of non-performing bank loans, AMCON has established that bad debts has accumulated to over N5 trillion, with the biggest loans owed by top level politicians, such as senators, and big-time business persons. According to AMCON, 20 individuals owe over 67% of the total loan stock. In spite of their high-profile public image, these individuals are not inclined to pay up the debts. They have been frustrating AMCON’s efforts with evasive measures, including concealment of their bank records. In the light of these challenges, AMCON needs to be repositioned. AMCON, on its own, has July 2020 as the expiration date of its initial 10-year lifespan.  It is in its ninth year, with hardly any significant response from its debtors to justify its mandate. The new law is, ostensibly, intended to address the major hindrance to the recovery of debts. AMCON can now access all financial records of debtors and compel them to pay their debts.

With the amendment, the coast is clear for the agency to put debtors under pressure. It needs to be appreciated that the circumstances surrounding these loans feature crass connivance on the part of bank officials who simply approved them under the atmosphere of conflict of interest. Personal benefit was the main incentive for loans that turned out to be non-performing. In resolving these bad loans, the consequences of criminal connivance by bank officials and other collaborators should be invoked, and penalties meted out to them.

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