By Andrew Oota
The Senate Committee on Banking, Insurance and Other Financial Institutions has backed the existence of the Asset Management Corporation of Nigeria (AMCON) despite the challenges confronting the agency.
This came to the fore when the Managing Director of AMCON, Ahmed Kuru, led top officials of the agency to the Senate to speak to the 2023 financial records and also defend the 2024 budget estimates.
Senators had expressed dissatisfaction and questioned the continued existence of the agency insisting it’s performance was below expectation and should be scraped.
Senator Sani Musa, wondered while, despite its huge liabilities, AMCON was not aggressive enough in its loan recovery drives.
He said, “Most of the loans were owed by individual companies which were never sanctioned and at the end of the day, the same company would go back to buy back their asset that AMCON had hitherto taken over. Are we going to continue like this?
“It is not only about defending 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 protect?
“Will it not be better to scrap AMCON since it seems to have lost its statutory mandate?
Speaking in similar vein, another member of the committee, Senator Jimoh Ibrahim, lamented the huge losses suffered by the assets recovery agency in the outgoing fiscal year.
Ibrahim said, “Your total comprehensive profit and loss, and it came in to 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.
“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-colateralised loans?”
Attempts by the Chairman of the Senate Committee, Senator Tokunbo Abiru, to defend the agency’s submissions dis not go down well with some members and the panel had to dissolve into a closed session.
After about 30 minutes, the doors of the committee room were thrown open and Abiru addressed journalist on the outcome of the executive session.
Abiru said, “The committee has agreed that there is the need for a strong financial system stability hence agencies like AMCON is still desirable.
“We also believe that the role of AMCON is further underscored by the fact that it was set up using a model that it 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 that are 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 it’s obligation at the possible shortest time.
“There is no society that does not have AMCON in one form or the other. The only way we can resolve financial stability is through the creation of an entity like this and we need to ensure it’s success,” Abiru added.
