Nigeria’s Finance Minister, Zainab Ahmedhas pledged to assist Asset Management Company of Nigeria (AMCON) in recovering some of the debts owed to it by debtors via the use of promissory notes.
The Minister made this promise while defending the 2020 budget of her ministry before the House Committee on Finance.
The Details: Ahmed noted that AMCON was financially ‘stressed’ and issuing a component of the promissory note would help to clear the debts.
“Currently, AMCON itself is stressed in the sense that the assets it bought are underperforming. The repayments that they are supposed to be able to make are not happening at the rate at which they should happen. And I understand that there had been effort to amend the AMCON Act to enable it become stronger in terms of its enforcement.
“We have the opportunity to help AMCON to recover some of the debts in its books.
“We will find out from AMCON what they owe and issue a component of the promissory note so that their debt is settled. That is the method we are adopting to help AMCON because most of the institutions acquired by AMCON are underperforming and putting the agency in very dire financial situation,” she said.
The backstory: Over 350 Nigerians are said to be responsible for more than 80% of the N5 trillion debt profile of AMCON. The huge debts have lingered for several years.
- AMCON was set up by the Federal Government in 2010 to acquire non-performing loans from banks in order to ensure the viability of the country’s financial sector.
- FG, through the operation of the Central Bank of Nigeria, conceptualized the idea for the establishment of a body that would prevent financial crisis in the country.
- In October 2018, the corporation published about 20 names of corporations and agencies who hugely contributed to the debt.
- AMCON also threatened to publish the full list and released a documentary on prominent Nigerians who are still owing the corporation.
- President Muhammadu Buhari assented to a new Act that gives AMCON more power to enforce recovery of debt from prominent Nigerians and corporate organisations.
- Recently, the Federal Government set up an inter-agency committee for the purpose of recovering the N5 trillion debt owed the Asset Management Corporation of Nigeria (AMCON).