AMCON: The last big push before sunset
“Every sunset brings the promise of a new dawn” - Ralph Waldo Emerson
Last week the Federal Government made true its resolve last June to set up an inter- agency framework that would comprise relevant government Ministries, Departments and Agencies, under the supervision of the office of the Vice President, to ensure that institutions and individuals that are indebted to AMCON are not allowed to do business with government until they settle their debts. Of course, this is subsequent upon AMCON’S management noble and well informed request to the VP to pursue the criminal/legal angle on the whole transactions.
The Vice President, Prof. Yemi Osinbajo, announced the establishment of the committee under the leadership of the AMCON’S CEO, Ahmed Kuru, to recover the outstanding N5trn debt owed AMCON by institutions and individuals across the country.
Agreeing with AMCON’S request showed clearly that the federal government is committed to lending its weight to AMCON’S recovery efforts. The intervention of the Vice-president, which is at the instance of the Corporation underscores the need to address the limitations AMCON has under its current law, which gives it power to prosecute but hamstrung it from enforcing compliance.
Therefore, the committee was populated with representatives from all our institutions with such powers to investigate, arrest and enforce compliance—efcc, ICPC, NFIU and Ministry of Justice.
The debt at stake is monumental — N5 trillion. Astonishingly it is owed by few individuals and companies. More annoying is the fact that 20% of the defaulters owe 80% of the money in question. No wonder that, for a start, the committee will be going after the top 20 debtors.
One may ask: why the sudden vigor in recovery efforts? Well, there are two key reasons.
First, our country needs that money to rejuvenate the economy. The debt is about 60% of the 2019 budget of the Federal Government. So, if that can be recovered, the level of infrastructural development we would witness, if used judiciously, would be great. And if nothing else, we shouldn’t lose sight that it is tax payers’ money. Secondly, AMCON’S sunset is looming. The 10year life span given to AMCON at birth, in 2010, to stabilize and re-vitalize our financial system, which was on the precipice, back then, is around the corner.
AMCON carried out the task by buying up non-performing loans from financial institutions. Its objectives included assisting eligible financial institutions to efficiently dispose of eligible bank assets; efficiently manage and dispose of eligible bank assets acquired by it; and obtain the
best achievable financial returns on eligible bank assets or other assets acquired by it. In the course of implementing its mandate, AMCON has bought huge toxic bank assets and injected huge amount of funds to stabilize our financial system from systemic collapse. But its successes in stabilizing the financial system will not be fully celebrated until it is able to recover those debts owed it by individuals and companies.
It is from these developments that I found the famous statement by Ralph W. Emerson, 19th century American poet and essayist, “Every sunset brings the promise of a new dawn” descriptive of AMCON’S situation today. .
I see the current recovery effort of AMCON at its sunset as heralding a new dawn; a dawn that will give a big sigh of relief to government that its strategy introduced a decade ago has worked. And that may give genuine reason for AMCON to remain, as long as our financial institutions continue to lend money, and continue to do the good works. And can modern economy survive without loan facilitation by its financial institutions?
It is not as if Nigeria is the only country where the assets recovery model has been applied. The model has been introduced in other countries with the same grace period of ten years. But, while it was smooth sailing in such countries as Malaysia, Ireland and the US, in Nigeria, it is taking time and proving difficult because of so many factors. Among them is our snail-speed court process. It is becoming a reality that in Nigeria, defendants are shielded from facing justice, while the complainants suffer unending court litigations.
At the last count AMCON has some 3000 court cases to contend with. And this is certainly not helping its asset recovery efforts. AMCON may have recovered a lot of these asset but they cannot dispose of them because the clients have run to courts and the courts are slow in deciding the cases.
Last June the Vice President commended the current management of AMCON for recovering some N1.22 trillion of the bad debt despites all the hurdles before it and pledges the Federal Government resolve to support the corporation, which he fulfilled by constituting the current debt recovery committee.
The commendation of the current management of AMCON by the Vice President is well deserved. The current management is proving to know its onions well. Since their assumption of duties they have not rested from applying one strategy or the other on how to recover the rescheduled debts AMCON acquired from financial institutions. Their measured successes are appreciable for those who know the Nigerian terrain and the arduous task of debt collection, which is very difficult everywhere in the world.
The list of the top 20 debtors is in the public domain already. The top four number companies were Capital Oil and Gas Industries, Nicon Investment limited and Bi-courtney Limited and Arik promoted by Ifeanyi Uba, Jimoh Ibrahim and Wale Babalakin (SAN) and Chief Ararume Johson respectively. Each of the four companies owed AMCON the sums of N115 billion, N59 billion, N40 billion and 200 billion respectively.
The bottom three debtors among the 20 top ones under debt recovery committee’s radar are Inoelle Williams, Wilcox Awopudagha and Prince Buruji Kashamu, whose businesses owe AMCON about N13 billion each.
It is instructive to realize that the concept of the Presidential debt recovery committee emanated from AMCON. Kuru and his management team thought of ways to circumvent the weaknesses of their operational structure by using the enforcement powers of existing institutions to achieve its goals. It is called operational mode adjustment within AMCON. It is a strategy that will see AMCON moving a step further from the conventional approach to enforcement one.
The approach is an ad hoc arrangement, though, until the National Assembly amended AMCON’S act comes to effect. It was once amended in 2015. But because of the new challenges that AMCON is experiencing now, the management has gone back to NASS for another amendment of areas that need to be sharpened and strengthened to enable timely recovery of debts.
But the success of this latest approach will largely depend on the political will that the federal government will bring to bear on the matter to ensure it recovers what is due to the state without necessarily emasculating the industries involved looking at their contributions to the economy in recent past.
There is no doubt in the integrity of the members of the committee, which comprises heads of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices Commission (ICPC), Nigerian Financial Intelligence Unit (NFIU) and permanent secretaries from ministries of Justice and Transport. The Vice President, whose office supervises the work of the committee, is a man of God with reputation to protect. Nobody is untouchable with him if they have done something wrong. And, he is the Head of the economic management team of the country.
So, as the committee starts its work, the doors of dialogue should not be closed totally on the faces of these captains of industries. On their sides, the industrialists must sit up, come up with genuine and sincere offers. There must be a way to recover these assets.
All eyes will from this moment be on AMCON as it tries its latest strategy of debt recovery. Could it be the last push before its sunset?
AMCON has been the sun of our financial institutions in the last one decade. Its twilight is nigh. Like Mehmet Ildan, another poet, would say, “Sunset is a wonderful opportunity for us to appreciate all the great things the Sun (read AMCON) gives us.
The intervention of the Vice-president, which is at the instance of the Corporation underscores the need to address the limitations AMCON has under its current law, which gives it power to prosecute but hamstrung it from enforcing compliance.