Belatedly, it has dawned on the Asset Management Corporation of Nigeria that only strong-arm tactics can produce the requisite result in its ongoing crusade to recover the huge debts owed by recalcitrant debtors. This has engendered the striking of a working alliance between the corporation and the Independent Corrupt Practices and Other Related Offences Commission, one of the two anti-graft agencies in the country.
During a recent visit paid by the Chairman of AMCON board, Muiz Banire, to the ICPC boss, Bolaji Owasanoye, where the deal for collaboration was struck, it was also resolved that other agencies that could be of help in the recovery of the huge debt should not be overlooked. It is therefore appropriate to suggest that the corporation should not hesitate to seek the assistance of the Economic and Financial Crimes Commission, which has a reliable history of the recovery of ill-gotten wealth from those who have inappropriately enriched themselves.
AMCON, the bad debt bank, set up to acquire non-performing loans from eligible financial institutions, is owed a staggering sum of N5 trillion. Quite revealingly, about 350 individuals are responsible for 80 per cent of that jaw-dropping amount, according to Banire. Given the current precarious state of government finances, it is imperative that AMCON should explore every legitimate means to enforce the recovery of the debt, because it is taxpayers’ money.
Five trillion naira cannot, by any stretch of the imagination, be described as a small amount of money. It is well in excess of 50 per cent of Nigeria’s national budget of N8.92 trillion for the current fiscal year. With such an amount, the country could reverse the trend of Nigerians trooping out to other countries for medical tourism by taking care of the decaying and crumbling health facilities here at home. That amount would more than put an end to the incessant strikes embarked upon by tertiary institution workers, who are always ready to down tools because of poor funding of education in the country. The road infrastructure gap would be considerably bridged if the money is put into its rehabilitation and expansion.
It should be stated that it is ethically unacceptable for a few Nigerians to illegitimately corner such a massive slice of the collective fortunes of a country where, according to the World Poverty Clock, over 90 million citizens are condemned to living in extreme poverty. This is a country that has been variously described as the poverty capital of the world, the worst place for a child to be born and a place afflicted with a host of diseases, some of which have been eradicated in other parts of the world. Nigeria is also one of the most terrorised in the world.
It is unfortunate that the government’s good intentions of setting up AMCON to revitalise and retool the financial system by resolving the non-performing assets of the banks have been so blatantly corrupted and abused. Worse still, some of the biggest culprits are still walking the streets free, flaunting their ill-gotten wealth. No efforts should be spared in ensuring that every kobo of the money is collected with interest as is done in other parts of the world.
When the United States economy went into a tailspin in 2008, with financial institutions such as Lehman Brothers, Freddie Mac, Fannie Mae and others thrown into crisis, the government thought the best way to tackle it was to set up the Troubled Asset Relief Programme. TARP, according to Investopedia, was an initiative meant to stabilise the financial system, restore economic growth after the meltdown and mitigate foreclosures.
In the course of implementing TARP, the US Treasury spent $426.4 billion between 2008 and 2010 to bail out the automobile industry and stave off the imminent collapse of other critical areas of the economy. By the time the programme ended, the country was able to recoup $441.7 billion, meaning that taxpayers’ money was not only recovered, the benefitting companies were able to pay back with profit. Apart from stabilising the automobile industry, the government claimed that over one million jobs were saved.
It was apparently a bid to replicate the success achieved elsewhere that led to the creation of AMCON. But if the Americans ended theirs with profit, how come Nigeria is saddled with a debt the size of about 60 per cent of the national budget? Obviously, because of the laxity in Nigeria, the debtors knew that they could get away with not paying back their debt. Not even the threat to name the debtors or deny them access to government business in an economy where virtually every business revolves around the government has been able to convince the debtors to pay.
This is why the Managing Director of the corporation, Ahmed Kuru, has called for the re-introduction of the Failed Bank Act to check the resurgence of non-performing loans in the banking industry. In fact, a judicial commission of inquiry is needed to fish out and punish all the people involved in amassing the non-performing loans, especially the bankers who failed to do due diligence resulting in the inability of people who took loans to repay. Those who compromised have no right to be breathing the air of freedom; they should be in jail by now. That is what is done in countries that have zero tolerance for financial crime.
Whatever options available before AMCON should be pursued speedily as the tenure of the body is coming to an end next year. Although some people are calling for the extension of the lifespan of AMCON, it is important to note that if America could use two years to operate TARP successfully, there is no reason why Nigeria should not complete the AMCON assignment in 10 years.