“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.
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.
Appointing Kuru to head the committee showed clearly that the federal government is committed to lending its weight to AMCON’s recovery efforts. The intervention of the Vice-President is not an indication that if AMCON has failed. Rather, it underscore the need to address the limitations to AMCON, which, under its current law, which gives it power to prosecute but hamstrung 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 owed by few individuals and companies. More annoying is the fact that 20% of the defaulters owe 65% 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 vigour 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, can be great. And if nothing else, we shouldn’t lose sight that it is tax payers’ money. Secondly, AMCON’s sunset is looming. The 10-year 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 management of AMCON under the indefatigable Kuru for recovering some N1.22 trillion of the bad debt despites all the huddles before it and pledges the Federal Government resolve to support the corporation, which he fulf illed by constituting the current debt recovery committee.
The list of the top 20 debtors is in the public domain already. The top three companies were Capital Oil and Gas Industries, Nicon Investment limited and Bi-Courtney Limited promoted by Ifeanyi Uba, Jimoh Ibrahim and Wale Babalakin (SAN) respectively. Each of the three companies owed AMCON the sums of N115 billion, N59 billion and N40 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 oweAMCON 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 amended of areas that needs to be sharpened and strengthened to enable timely recovery of debts.
Some of its recovery strategies in the recent past include divestments. For example, AMCON recovered the sum of N152.3 billion from its equity injection of N1.49 trillion to the five EFIs. This represents a 10% recovery rate on investment. Similarly, AMCON successfully divested the three bridge banks to private investors for a combined sum of N207.8 billion. This represents a 23% recovery rate on amount invested.
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.
So, as the committee start its work, the doors of dialogue should not be closed totally on the faces of these captains of industries, On the one hand, 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.
Bashir Ibrahim Hassan
Hassan wrote from Abuja.
