By Oscar Japhet
The story of Asset Management Corporation of Nigeria (AMCON), just like many other Federal Government agencies, is that of a beautiful concept but with poor implementation. This is resulting to loss of public confidence and damaging the economy.
There is no doubt that enormous non-performing loans pose a big challenge to financial institutions and the Nigerian economy. This financial insolvency, led to the creation of AMCON.
Unfortunately, instead of sticking to its original mandate, AMCON officials seem more interested in taking over assets of these businesses. Their aim is to sell them off, either to themselves and/or their cronies for pittance.
In any case, most of these loans that turned bad, came about due to the economic downturn. And the policy flip-flops of the government which are beyond the control of these business owners.
Therefore, one begins to wonder whose interests AMCON and its officials are serving. Does it not bother them that this penchant of taking over companies and assets leads to loss of jobs?
Of what benefit is it to the government and the economy, if the operations of AMCON is worsening the already bad economic situation with the closure of companies?
At its inception, the understanding of the banking industry and the business community, was that AMCON will help to strengthen the economy.
However, there is a widely but wrong impression that every loan that went bad was due to mismanagement of funds. Hence the first step is to seize the assets of the company concerned. This is akin to everyone being tarred with the same brush.
Has anyone wonder why do many loans go bad? Has the economic policies of the past and present governments been supportive of the private sector?
Let us take for instance, the recent unification of the exchange rate. How will a borrower, who only three months ago, took a huge short-term bank loan in Naira to import goods in US Dollars, make substantial profit and repay the said loan within the agreed period?
What has the government done to stem the rising tide of smuggling, which suffocates local producers? What about the deteriorating infrastructure? More questions than answers!
Therefore, lack of human face by the government with respect to the local businesses, has created a band of undertakers in AMCON.
Economic analyst believe AMCON is merely witch-hunting borrowers, whose business are facing challenges. As soon as these businesses show any semblance of distress, they pounce on their juicy assets.
This is not with the aim of recovering the loans, but with the ulterior motive of lining their pockets with the lucre that comes from selling off these assets.
Stories are replete of how AMCON has taken over businesses that are still going concerns and today such businesses are barely surviving, some are even no longer existing.
To make matters worse is the current trend of trying to use the judiciary to legalise this obnoxious practice. In recent times, the media has been awash with cases of AMCON obtaining ex-parte injunctions against companies. This is in order to take over their assets.
This is despite the fact that most of these companies are still negotiating with AMCON on how they will pay the debts. In fact, it is no longer news, that AMCON choses and picks which court judgment to obey and which to ignore.
Therefore, most times they act even when they are restrained by court orders, which is a clear case of contempt of court.
In some cases, the debts in question have been cleared, but AMCON chooses to turn a blind eye. This is because the acquisition of assets, especially those located in highbrow areas, serves the interest of highly placed AMCON officials and their paymasters.
It is obvious that AMCON is a party in most of these court cases instituted by it or against it. Therefore, it is alarming that the management of AMCON hobnobs with the judges who are handling these cases.
One begins to wonder how these judges maintain independence in these matters. A good case in point, is the recent training programme for judges of the Federal High Courts, held in London. AMCON allegedly bankrolled this programme.
It goes without saying that the time has come for the government to review the operations of AMCON. The government should also determine whether the corporation is still relevant in the scheme of the overall project of the nation’s economic revival and sustenance of businesses.
The government established AMCON about 14 years ago, initially set up as an ad-hoc arrangement. It should have rounded off its activities after a 10-year operation.
By this time, it is believed that other statutory regulators such as the Nigeria Deposit Insurance Corporation (NDIC), would have been better equipped to monitor the industry players and reduce cases of bad loans.
However, due to the usual Nigerian factor, AMCON has transited from a temporary arrangement to become a permanent institution. This is good news for those who are benefitting from this cesspit of corruption.
But, it is bad news for the Nigerian business community. This is because the activities of AMCON poses a danger to the general economic prosperity.
Japhet, a Nigerian in Diaspora, writes from Southern Carolina, U.S.A.
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