By Abubakar Yusuf
When you talked about an average rich Nigerian, what readily comes to mind is debts. It cut across all facets of our life, be it in business, politics, religion, education and any other activities you may think of, this ugly development had degenerated beyond contemplation and redemption.
This is a clear conviction that Nigeria is truly ravaged by the activities of Bank debtors who had a well-articulated business proposals before approaching the money Banks for loan, with no intentions to repay, a trend that had eaten deep into the fabric of many borrowers. With 12 years moratorium after Banks borrowers were given opportunity at redeeming their obligations and exposure to Nigerian Banks, same old story is still playing back from recalcitrant borrowers.
The leverage on the precarious economic situation, government in the last 12 years initiated a recovery agent to interface with dissidents Nigerian Banks debtors running into about N10trn through Asset Management Corporation of Nigeria (AMCON), by taking over toxic Non-Performing Loans NPL’s from Eligible Financial Institutions EFI and its Eligible Bank Assets EBA.
The NPL’s of the recalcitrant Bank debtors in Nigeria numbering over 12,000 accounts was reduced to 7,000 through recovery by debt agency and some extra-legal means instituted by AMCON in the last 12 years. But, with all efforts, the exposure of Nigerian Bank debtors still stood at over N4 trillion with no favourable response from the chronic debtors, that prompted the amendment of the act and assented by The President, Muhammadu Buhari in 2021, and subsequent decision by the National Assembly to AMCON to publish names of obligors.
This is coming after over a decade of AMCON’s efforts at stabilising the Banking sector, obligors’ exposure to Banks, Nationalisation of some Banks, customers confidence in Nigeria Banks and restored economic sector with multiplier effects on the growth of the economy. The decision of AMCON to publish names of Banks debtors in Nigeria followed due process by giving one month notice in line with its new mandate to recover in totality, obligors’ exposure to Nigerian Banks.
With the amendment of its act and assented by President Muhammadu Buhari, legislatures directive and the special court put in place by the judicial arm of government, to reduce multiple legal lacuna witnessed in the last one decade. This no doubt will mitigate the growing debt profile and borrowings by government in recent times that affected the day to day running of government businesses.
With the decision of Senate to pass an enabling law that will confiscate ill-gotten wealth by Nigerians having passed through its second reading, it is imminent that AMCON’s decision was a right step in the right direction. It is in the public glare that Central Bank of Nigeria directives to commercial Banks to recover all monies borrowed, as well as NPFL’s loans availed customers, had given credence to the efforts of the recovery agency to ensure customers of Banks returned borrowed funds.
With 94% of 2022 budget being deployed to service debts owed by the country, it became worrisome that a decade after, Banks still indulge in harbouring non-Performing Loans NPFL’s in Banks, and the country using the chunk of its resources for 2022 budget to service debts.
The unfortunate development had given credence to the aggressive and legal moves by AMCON to recover without further delay the outstanding N4trillion from Nigerian debtors, by exposing them through making public their names in the dailies. With N4trillion plucked back to the economy after recovery, it will reduce to some reasonable percentage about N16 trillion 2022 budget meant for debts servicing.
AMCON as the recovery agency has a timeline of recovery of debtor’s exposure to Banks, that was taken over at inception, and must ensure its recovery and winding down of it’s activities in Nigeria. It is expected of the debt recovery agency to return Nigeria in it’s entirety to free debt profile, as the recent directives from the apex Banks to commercial Banks raised serious concern.
The Ahmed Lawan Kuru led Asset Management Corporation of Nigeria AMCON has a mandate of returning the insolvent Banks to solvency within the shortest possible time. The success of the recovery drive will go a long way to ameliorating both economic, social problems/gap created by the current situation in Nigeria.
…Yusuf, a Public Affairs analyst, writes from Abuja.
