BY BUKOLA IDOWU, Lagos
The Chairman of House of Representatives Committee on Banking and Currency, Hon. Sir Jones Chukwudi Onyereri, has said the House of Representatives of the Federal Republic of Nigeria will not be lured into supporting the deceptive plot orchestrated by some people to lure Asset Management Corporation of Nigeria (AMCON) to purchase new debts from Deposit Money Banks (DMBs) in the country.
Speaking at a retreat for lawmakers yesterday, the House of Representatives members argued that it would not be the right decision for the country considering the state of the economy, which is on the pathway to recovery after sliding into recession.
“We are also aware that some economists are clamouring for AMCON to buy more toxic assets from the Eligible Financial Institutions (EFIs) in view of the very high level of the non-performing loans that are worse than the 2009 experience and far above the regulatory threshold. We wish to sound a note of warning that this Committee will not; I repeat will not support any such move. At least not at a time like this in the history of our economy,” Onyereri stated.
While stating his displeasure on AMCON obligors exploiting the court system whilst they continue to do business with the Federal Government and get paid, he said, “We have to find ways to ensure better cooperation from the EFIs to enable AMCON effectively recover these loans.
“Where they are not willing to cooperate with AMCON, then AMCON must and should enforce its right of clawback on the EFIs. It is important to remember and note that public funds were used to buy these loans that helped prevent the EFIs from going under and as a matter of public urgency AMCON needs to recover these monies.”
Managing director and chief executive officer of AMCON, Ahmed Kuru disclosed to the committee that the Corporation’s recent assessment of obligors as at December 31, 2016 identified 350 accounts with a current exposure of N2.5 trillion that represent about 80 per cent of AMCON’s total obligor debt.
“AMCON has also repositioned its debt recovery approach to strengthen legal and credit restructuring units to collaborate on the aforementioned 350 accounts termed “defaulters”; enhance the restructuring and turnaround team; and engage in asset tracing to enhance recovery in spite of the difficulties, AMCON continues to persevere in the face of adversity,” Kuru said.
Providing additional insight into the challenges of AMCON, Kuru lamented that the ramifications for failure by AMCON to recover its debt, principally owed to the Central Bank of Nigeria (CBN), cannot be quantified as it goes beyond economic cost. According to him, in the last two years, AMCON debt repayment to the CBN were N456.4 billion and N517.7 billion but actual payments were N256.7 billion and N191.1 billion in 2015 and 2016, respectively.