Recently, the Federal Government set up a special task force to recover over N5trillion outstanding debts owed the Asset Management Corporation of Nigeria (AMCON). According to the Office of the Vice President, members of the task force included the heads of AMCON, the Economic and Financial Crimes Commission (EFCC), the Nigerian Financial Intelligence Unit (NFIU), the Independent Corrupt Practices Commission (ICPC) and the Permanent Secretaries, Ministries of Justice and Transport.
The task force was mandated to work out and implement new strategies that would ensure that the debts are quickly recovered. Also, the task force would target the first 20 debtors on the AMCON list, who according to the AMCON Chairman, Muiz Banire, constitute about 67 per cent of the N5trillion debts. In addition, the government tasked the committee to examine the steps it would take to recover the debts.
We recall that the new effort is one of the attempts in recent times to recover the huge debts being owed AMCON. Three months ago, the Vice President Prof. Yemi Osinbajo, met with the management of the corporation to recover the debts through the courts, but little progress was made. Now, it seems that time is running out to recover the debts. We say this because AMCON which was established in 2010, began the purchase of Non-performing loans (NPLs) in 2012, and will stop operation in 2023 when its 10-year mandate will expire.
It is sad that the objective of setting up AMCON is being vitiated by the unscrupulous attitudes of a few powerful individuals in the country. At inception in 2010, AMCON acquired about 13,000 non-performing loans and through such intervention saved over 14,000 jobs nationwide. But now, it has over N5trillion debts to recover from chronic debtors. The amount is more than double the loans the Federal Government would incur to support the 2019 budget. It is worrisome that some of the chronic debtors are currently holding leadership positions in the country. It is also unfortunate that about 20 per cent or N740billion of the N3.7trillion total Eligible Bank Assets (EBAs) are in the hands of the debtors.
Considering the enormous responsibility placed on the task force, we urge the members to use every legitimate means to recover the debts. It is disheartening that despite the fact that AMCON was created to be a stabilising and revitalising tool for reviving the financial system, it has achieved less than 20 percent debt recovery rate. Figures from the corporation show that it has been able to achieve only an annual recovery rate of less than 2.5 per cent. This is an abysmal rate. There is need for a new approach that will make the corporation utilise its statutory powers to deliver its mandate.
For instance, Section 48 of the AMCON Act empowers the corporation to either act as or appoint a receiver for a debtor-company which assets have been charged, mortgaged or pledged as security. In addition to receivership, the corporation is also empowered under Sections 49 and 50 of the AMCON Act to, through an ex parte application seek a forfeiture order against the assets of a debtor. This provision should enable the corporation move stealthily without tipping off any of these crafty debtors as the forfeiture order vests the control and possession of the assets in AMCON, pending the trial and judgment. The task force should leverage on the provisions of the AMCON Act such as bankruptcy, receivership and asset tracing in its quest to recover the debts.
The debt recovery should be pursued aggressively. However, there is need to amend some sections of the AMCON Act which are defective. This will enable the corporation to seize and dispose the assets pledged as collaterals by the debtors.
Unfortunately, the powers contained in the AMCON Act are either underutilised or not effective enough to drive its mandate. At times, this has resulted in AMCON losing some cases against loan defaulters. The task force should see its assignment as a big challenge which requires all hands to be on deck. The debts are so huge that the government cannot afford to write them off. Therefore, let the debts be recovered.