This is the full text of the speech by the Chairman House of Representatives Committee on Banking and Currency, Hon. Sir Jones Chukwudi Onyereri KSP on the occasion of the retreat with management OF Assets Management Corporation of Nigeria and members of the House Committee at Golden Royale Hotel Enugu, June 16 – 20, 2017
On behalf of my Colleagues and Honourable members of this committee, I welcome His Excellency Rt. Hon. Ifeanyi Ugwuanyi, (Gburugburu) our host Governor and the team from the Asset Management Corporation of Nigeria (AMCON) to this interactive retreat between the House Committee on Banking and Currency and the Asset Management Corporation of Nigeria (AMCON). This is one in the series of scheduled annual interactive retreats with AMCON, which organization falls within the legislative oversight ambit of this committee.
Interactive retreats such as this are essential aspect of our legislative process. These retreats afford the committee members the opportunity to rob minds with the management team of AMCON with regards to insights into the operational challenges and difficulties they may be encountering in the running of the agency. This enables the legislature to be duly informed on how to straighten AMCON towards operational effectiveness and efficiency through vital legislative instruments.
It must be recalled that AMCON is a child of the National Assembly with the passing into law of the enabling Act in 2010. It was created to assist the Nigerian financial sector achieve stability by buying toxic assets of Eligible Financial Institutions (EFIs). In 2015, certain parts of the AMCON Act were amended in order to further strengthen the institution – which included the establishment of the Resolution Sinking Fund.
As an interventionist institution, AMCON, since its creation has performed above board, but is often constrained by institutional and legal stumbling blocks from achieving optimum results. These legal and institutional bottlenecks arise from 1) Lack of co-operation from EFIs, 2) Issues relating to Clawback on EFIs and intervened banks, 3) Wrong interpretation of the AMCON Act, which has led to conflicting decisions by the law courts especially where it relates to possessory and freezing orders and 4) Disingenuous acts of the obligors, who exploit our court processes and the short comings in the extant statute to frustrate the efforts of the corporation in recovering the loans from obligors.
I find it troubling that while some of these obligors frustrate AMCON recovery efforts by exploiting the court system, they continue to do business with the Federal Government and get paid. These issues contribute a lot in hampering the efforts of the corporation and must be nipped in the bud through proactive legislative instruments. We have to find ways to ensure better cooperation from the EFIs to enable AMCON effectively recover these loans. Where they are not willing to cooperate with AMCON, then AMCON must and should enforce its right of Clawback on the EFIs. It is important to remember and note that public funds were used to buy these loans that helped prevent the EFIs from going under and as a matter of public urgency AMCON needs to recover these monies.
Likewise, there is need to sensitize the courts on the need for speedy resolution of AMCON cases that are before the courts. The court processes need to be streamlined and obligors prevented from using technicalities from circumventing the process. We are also aware that some Economists are clamoring for AMCON to buy more toxic assets from the EFIs in view of the very high level of the non-performing loans that are worse than the 2009 experience and far above the regulatory threshold. We wish to sound a note of warning that this Committee will not support any such move.
There is therefore the need to look at the AMCON Act again and see what can be done to help eliminate these challenges. At a time like this – in this period of economic recovery and growth, we need to be more proactive in our efforts in helping our country come out of its present economic situation. In light of these and other challenges faced by AMCON in the discharge of its statutory obligations, the House Committee on Banking and Currency will ensure that quality distilled ideas reached at the close of this interactive session will greatly contribute towards the amendment of the AMCON Act that will hopefully help in enhancing the performance of the corporation.
It is my pleasure to once again on behalf of the entire membership of the committee, welcome His Excellency and the management team of Asset Management Corporation of Nigerian to this interactive retreat.
Thank you and God Bless You.