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Senate mulls scrapping of AMCON over poor financial performance

10th Senate @ 1: Any hope for the nation?

The Senate Committee on Banking, Insurance, and Other Financial Institutions demanded the dissolution of the Asset Management Corporation of Nigeria (AMCON) over poor financial performance and its failure to recover N5 trillion in liabilities.

During the budget defence for the 2024 fiscal year, Ahmed Kuru, AMCON’s Managing Director, revealed that only N648 billion had been recovered out of the total liabilities as of September 20, 2023.

This disclosure raised concerns among members of the Senate panel about the agency’s financial performance throughout the year.

Sani Musa, the chairman of the Senate Committee on Finance, expressed dissatisfaction, pointing out issues with loans owed by individual companies and the subsequent repurchase of assets.

Read also Winding down AMCON- Matters Arising

Musa questioned whether it was prudent to maintain AMCON or consider its dissolution given its perceived deviation from its statutory mandate.

“Most of the loans were owed by individual companies that were never sanctioned, and at the end of the day, the same company would go back to buy back their assets that AMCON had hitherto taken over. Are we going to continue like this?

“It is not only about defending the budget; it is about seeing the effect of the Appropriation; we need to know whether it is working. Or are we just creating a job for those we can’t protect? Will it not be better to scrap AMCON since it seems to have lost its statutory mandate?” he queried.

Jimoh Ibrahim (APC, Ondo South), and Adamu Aliero (PDP, Kebbi Central) among other committee members, echoed the call for AMCON’s dissolution, citing financial losses and discrepancies in its balance sheet.

Read also Transitioning AMCON – the choice between winding down and privatization

Ibrahim questioned the agency’s role and financial losses despite being tasked with collecting bank loans. “Your total comprehensive profit and loss and came into a loss of N145bn. This calls for concern. Your net operating profit and loss is N126bn. What is responsible for all these big losses? You are created to collect bank loans from them”, Ibrahim said.

“Even if you’re now regulators to the debtors, why are you incurring losses? Your balance sheet is not looking so good. Again, why are you buying cash-collateralised loans?” he added.

Tokunbo Abiru, Chairman of the Senate Committee on Banking, attempted to defend his colleagues during the deliberations. However, Abiru called for a closed-door session to address the issues as tensions escalated.

Abiru, speaking after the door session, emphasized the importance of a strong financial system and acknowledged the role of AMCON in addressing past challenges.

Read also AMCON recovers 70% of bad debts

Abiru concluded that AMCON’s existence is essential for financial stability, emphasizing the need to ensure its success while working towards winding down its obligations in the shortest possible time.

“We believe that the role of AMCON is further underscored by the fact that it was set up using a model that would help us to tidy up the challenges that we had in the financial system in the past.

“The only challenge that we had today is that we need to have a definite time that all the obligations hanging on the throat of AMCON must be redeemed.

“The conclusion is that we will continue to work with AMCON and other agencies to fashion out a model that would make AMCON openly wound down its obligation at the possible shortest time,” Abiru said.
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