The Asset Management Corporation of Nigeria (AMCON) has approached the National Assembly to be accommodated in the provisions of the newly amended Banks and Other Financial Institutions Act, 2020 (BOFIA, 2020), which sets up Special Tribunals for hearing financial matters emanating from the financial institutions.
The Managing Director/Chief Executive Officer of AMCON, Mr Ahmed Kuru, made the plea before the Senate Committee on Banking, Insurance and other Financial Institutions at the National Assembly in order to quickly settle the Corporation’s liability in excess of N5.4 trillion.
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Kuru said the proposed amendment and a few others will be critical to AMCON’s expected deliverables as they would enable the Corporation to resolve the debts fast.
According to a statement from the corporation, the Senate Committee chaired by Senator Uba Sani (Kaduna State) had invited AMCON top executives and that of other key stakeholders/sister agencies of the Federal Government including the Central Bank of Nigeria (CBN), the Ministry of Finance and the Nigeria Deposit Insurance Corporation (NDIC) for another engagement regarding the amendment of the Asset Management Corporation of Nigeria Act No.3 (Amendment Bill) 2021.
Kuru said: “The designation of a special tribunal for financial cases immediately assumes the achievement of quicker resolution of matters in Court as the Judges are designated to hear only such financial matters.
“Moreover, BOFIA prescribes a maximum period of six months to conclude matters brought before the Tribunal. AMCON being accommodated under this Tribunal will assist AMCON with its speed of recovery.”
Providing justification on the proposal, Kuru reminded the Committee that Section 61 (b) is ascribing a tenor for the operation of the Resolution Cost Fund, describes same as a period of 10 years from the calendar year 2010 but may be extended by not more than a maximum of five years by the National Assembly.
This, he said, was done under the assumption that the debt obligations will be extinguished within 10 years.
“The effect of the above description therefore is that the tenor ascribed for the life of the Resolution Cost Fund has elapsed by time. Going by this, the tenor expired in December 2020. The need for the amendment of the provision of the Act therefore becomes inevitable towards ensuring a sustained operation of the activities of AMCON,” Kuru stated.
According to him, it is worrisome that if AMCON disposes of all the assets securing the loans, it can only realise slightly above N1tr with the liability in excess of N5.4tr. He noted that the AMCON Act encourages asset tracing for accounts for the gap, plus contributions from the financial institutions including the CBN.
He however regretted that as at today, the contributors have not been able to meet the expected yearly amounts, which he said is mainly due to the fact that the assumptions have not materialised.
Therefore, the only remedy is to provide an inbuilt legal mechanism whereby they continue to contribute in addition to recoveries until the whole debt is paid, otherwise the obligation falls on taxpayers, Kuru concluded.