The Managing Director, Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, has disclosed that political officeholders including ministers and lawmakers (names withheld), are among the 350 Obligors that account for over 80 percent of the N5.5 trillion debts it inherited as a result of non-performing loans (NPLs) in the country.
Kuru, at the July 2019 breakfast meeting of the Nigerian American Chamber of Commerce (NACC), added that plans are underway to do a documentary on some of the obligors for publication to serve as a deterrent.
He also said AMCON is currently working with the Economic and Financial Crimes Commission (EFCC), and Independent Corrupt Practices Commission (ICPC), to go through the credit process to see how credit abuses occurred in a bid to establish irregularities.
In his words: “The next level is for us to recover these loans and this is the challenge. Only 350 obligors out of the 1,2000, account for more than 80 per cent of the N5.5 trillion, and you know all of them and that is why it is very sad. For us at AMCON, they must pay back this money, and it is so tragic that some of these people are ministers, senators at the national assembly, and pro-chancellors who are supposed to be role models.”
According to him, by intervening in eight banks, AMCON saved depositors’ money worth N1 trillion.
“We have saved jobs in excess of 15,000 in the banking sector, and we have also provided liquidity for those banks because they were not in the position to lend money. When we purchased those loans, we were able to ensure that the NPL ratio in the industry was less than five per cent, which also meant that all the banks then were NPL-compliant,” he explained.
He noted that in the past, AMCON disbursed about N320 billion to support businesses directly after purchasing those loans from the commercial banks, but stressed that regrettably, the performance level from the executive was less than five per cent.
“In Nigeria today, the major challenge we have with almost all the businesses in the absence of good leadership of these companies; and when you add lack of infrastructure and high-interest rate, you can imagine why businesses fail,” he added.
He said the quickest way for a bank to go bad is through bad credit, maintaining that once the NPL has gone off a certain threshold, it means banks are using depositors’ money to run their operations.
“Our debt now hovers at N5.5 trillion. Out of the 12,000 accounts, we have structured more than 3,000, and we have been able to get over 1,000 obligors out of the positions they were before,” he added.
Earlier, the NACC President, Oluwatoyin Akomolafe, said financial system stability has become a major macroeconomic policy objective because of the severe consequences of the previous incidents of financial catastrophes.
He said AMCON was created to be a key stabilising and re-vitalising tool aimed at reviving the financial system by efficiently resolving the NPLs of the banks in the Nigerian economy.
“We are all be aware of the 2008/2009 financial crises that led to the injection of a huge amount of funds by the authorities to recapitalise some banks that had become insolvent. Those same crises resulted in a full-blown financial mess that necessitated the setting up of AMCON in order to rescue the banking system” he said.
He pointed out that despite that the global financial system is edging toward greater stability, the government must deal with differing regional and national needs.
He added: “The same reason is why some nations are trying to discontinue unconventional monetary policies installed to cultivate recovery; while others are expanding their scope and scale. Given the current circumstances, and particularly with regard to the national economy, the issues of financial system stability have moved into the focus of public attention.”