N5tr AMCON Debt: Nigeria Needs Loan Tribunal- Senate

The Senate Committee on Banking Insurance and other Financial Institutions, at the weekend in Abuja agreed on the need to establish loan/credit tribunals, as part of efforts to further help the Asset Management Corporation of Nigeria (AMCON) recover its outstanding debt estimated at N5tr before its impending sunset.

Chairman of the committee, Senator Uba Sani, spoke after a presentation by Ahmed Kuru, chief executive of the corporation, when the management of AMCON appeared before a technical session of the Committee to review the impact of COVID-19 on AMCON policies and processes. The review, according to a statement by the corporation, is part of efforts at repositioning the corporation for optimal performance amidst the pandemic.

Kuru had lamented that some top obligors of AMCON still hide under legal technicalities to hamstring the corporation in courts, exploring loopholes in the Act before the amendment. He blamed this on the slow judicial processes, in the form of undue adjournments, lack of hearing date and adequate understanding of AMCON Act among other issues.

Consequently, Sani said the committee and AMCON have identified strategies employed by such debtors to stall repayment of their loans, including the undue delay of court cases for many years.

“It is strongly believed that the provision for a Loan/Credit Tribunal will assist AMCON in its loan recovery efforts,” the Senator added, assuring that the 9th Senate would strongly consider all recommendations that can enhance the efforts of AMCON, thereby propelling the nation’s economic revitalisation.

For him, “since the pandemic is not in a hurry to go away, we must continue to initiate and finetune measures aimed at stabilizing the economy.

“Stakeholders must work together in ensuring that government efforts are optimally achieved with tangible and visible results,” he stressed, lamenting that AMCON remains at the receiving end of orchestrated acts of economic sabotage.

Weekend’s engagement with the management of AMCON, he explained, has 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.

The meeting, he explained further, also addressed the continued reduction of high rate of Non-performing Loans (NPLs) as well the challenges of AMCON, notably policies and procedures, implementation strategies and assets recovery in the heat of COVID-19 pandemic.

Addressing committee members when he led AMCON’s management to appear at the technical session, the Managing Director/Chief Executive reiterated his earlier call for legislative support to the agency, including the need to pile pressure on some of the obligors (debtors).

This, he believes, has become necessary given that they “are very important members of the society,” even as the senators “have all it takes to intervene and even compel AMCON obligors to meet their obligation.

“This is because we cannot over emphasise the importance of recovering the huge outstanding and the positive impact it will have in the Nigerian economy, which like other economies have been further challenged by the outbreak of the dreaded coronavirus (COVID-19) pandemic,” he stressed further.

Some members of the Senate Committee on Banking, Insurance and Other Financial Institutions, and the management of AMCON at the weekend in Abuja.

But in spite of all these challenges heightened by the ravaging pandemic, Kuru told the committee that the corporation, as of August 2020, had assets under management (AUM) valued at about N136.73bn, in addition to about N112.03bn worth of propriety assets.

The AMCON CEO added that “COVID-19 (Coronavirus) pandemic has had a monumental impact on the globe and Nigeria in particular. Not only has it adversely affected the global economy, but the entire health system of the world has remained on its knees.

“AMCON, one of the institutions of 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 & 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 pandemic on most businesses and indeed the economy at large, the Corporation has begun consideration of granting moratorium to deserving obligors that had hitherto shown commitment/seriousness towards resolving their indebtedness. On our day-to-day operations, the Corporation has taken several measures to withstand and curtail the spread of this pandemic.”

CAPTION (OPENING PHOTO): Senator Uba Sani, Chairman, Senate Committee on Banking Insurance and Other Financial Institutions (left), with Ahmed Lawan Kuru, Managing Director/CEO Asset Management Corporation of Nigeria (AMCON).