Due to the global financial crisis and domestic events, the federal government of Nigeria, through the Central Bank of Nigeria, conceptualized the idea for the establishment of a body to prevent a looming financial crisis. Hence, the birth of the Asset Management Corporation of Nigeria (AMCON), was established by the Act of the National Assembly of Nigeria in July 2010, with an intended 10-year lifespan. The objective was to detoxify the banking system through the purchase of bad assets, non-performing loans, and liquidity injection into troubled banks. Its mandate includes: (i) assisting Eligible Financial Institutions (EFIs) in efficiently disposing of Eligible Bank Assets (EBAs); (ii) efficiently managing and disposing of EBAs or other acquired assets; and (iii) obtaining the best achievable financial returns on EBAs. To achieve these mandates, AMCON is empowered with a wide range of functions, including issuing bonds and other debt instruments, maintaining a portfolio of diverse assets, providing equity capital, borrowing money in domestic or foreign currencies, and entering into financial derivative contracts.
CURRENT STATUS AND CHALLENGES:
Some argue that AMCON was not designed to last 10 years, but the funding model was projected to last 10 years depending on the economic situation. Unfortunately, AMCON has reached a stage in its operations where its future successes and achievements depend on the strategy of the law and its application. It is disheartening that, besides the efforts of AMCON officials, progress depends substantially on third parties like the judiciary and other government agencies. On that basis, AMCON sought an amendment to its Act, hoping that the amendments would curtail frivolous tactics employed by recalcitrant obligors under our judicial system and improve debt recovery efforts.
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