The Federal Government has been challenged to expand the laws that granted the Asset Management Corporation of Nigeria (AMCON) special debt recovery powers in the AMCON Act as amended into a national law that would insulate the banking sector against reckless borrowers and recalcitrant debtors that AMCON is currently chasing for the recovery of trillions of Naira.
The debt recovery agency, which has since inception in 2010 recovered over N1.4trillion had at different phases from the year of its establishment, purchased 12,743 NPLs or Eligible Bank Assets (EBAs) worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs) for a purchase price of N1.8 trillion. Since then, AMCON has worked tirelessly to recover the huge debt, which were covered by various collaterals. But as the years roll by, AMCON obligors have become more daring, and hiding under all manners of legal technicalities to delay the agency from recovery.
Speaking at the weekend at the training of Solicitors, Receivers and Receiver/Managers at a Eko Hotel, Lagos, Mr Oluwakemi Balogun SAN of the firm of Oluwakemi LP said debt recovery in Nigeria will continue to burden AMCON as well as the financial sector as long as the system allows some Nigerians to brazenly walk into banks to borrow money with no intention to repay the loan obligation.
Having watched such financial rascality for some decade, the Senior Advocate opined that something drastic must be done by the government to save the country. According to him, some Nigerians in the last 25 years have perfected the act of going to different banks to borrow money and have serially defaulted in the repayment agreement because they country has no policy that guides such recklessness.
As a mitigant to such ugly development, the legal luminary added, “We need to have a national law that will assistant lenders (banks and financial institutions). We must have a national policy. There must be a national law on debt recovery. This law should not just be for only AMCON as a government agency but for the nation as a whole. That is one of the ways we can curb the bad behaviour. In some other economies you cannot borrow money and refuse to pay back and go scot-free. Therefore, Nigeria should not allow recalcitrant debtors to go unpunished.”
Balogun SAN was reacting to the different presentations at the programme including the keynote address of the AMCON Managing Director/CEO who was represented at the event by Mr Benedict Daminabo, a Group Head of Asset Management. The AMCON CEO had earlier said the agency will continue to highlight the dangers of not recovering the debt because of its grave implication.
According to him, “We have repeatedly made the point at every opportunity that all stakeholders must view the AMCON mandate as one of serious national importance. If at sunset AMCON is unable to recover the huge debt of over N5trillion, it becomes the debt of the Federal Government of Nigeria for which taxpayers’ monies will be used to settle.
“The implication is that the public will be made to pay for the recklessness of only a few individuals who continue to take advantage of the loopholes in our laws to escape their moral and legal obligations to repay their debts. As a matter of fact, we have reached a point in our country where all stakeholders (the federal government, the judiciary, the legislature and the public) must work together to fight the common enemy of this huge debt burden.”
But challenging as the agency’s debt recovery activities have shown especially given its peculiar situation, AMCON is steadily making remarkable recoveries but still has about 7,902 outstanding obligors with total outstanding loan of N3.142 trillion. Of this number, 350 of the agency’s obligors account for N2.053 trillion, which is above 65% of total outstanding amount.
Facilitators at the event, which was also attend by Hon. Justice Faji of the Federal High Court, Lagos Division, Chritene Clement Ende, the Deputy Chief Registrar include Mr Muyiwa Balogun, a Senior Partner, Olaniwun Ajayi LP; Mr Tajudeen Shola Oyerinde, the Principal Partner, Adegboyega Oyerinde & Associates as well as Mr Robert Odihi of Dele Oye & Associates. The training was organized by firm of Legal Academy led by Dr. Fatihu A. Abba.