There have been some noticeable and, no doubt, bold steps taken by the government recently to ensure that some privileged Nigerians who have deceitfully cornered a mammoth slice of the country’s collective wealth through the manipulation of the financial system do not use their enormous influence to make away with it for good. Not only has the government set up a task force to enforce the recovery of the over N5 trillion indebtedness to the Asset Management Corporation of Nigeria, the President, Muhammadu Buhari, has also assented to the AMCON (Amendment) Act 2019 to plug the legal loopholes that might hinder the corporation in performing its duty.
Specifically, the AMCON (Amendment) Act 2019 gives sweeping powers to the corporation to monitor activities of the Nigerian debtors to ensure that they do not unduly take advantage of the weakness in the country’s banking system. Among other things, the Act says that the “protection of customer confidentiality is not a ground for the denial of the power of the Corporation” to act. The corporation is further empowered to place any bank account or any other account comparable to a bank account of a debtor of an eligible financial institution under surveillance.
With these measures, the government seems to be making no bones about its resolve to go after the high profile recalcitrant debtors, especially the very few said to be responsible for the bulk of the AMCON debt. According to the chairman of the AMCON board, Muiz Banire, a Senior Advocate of Nigeria, only 20 individuals or entities are responsible for 67 per cent of the debt. But also expounding on the matter last month, AMCON’s Managing Director, Ahmed Kuru, said, “To enable you (to) understand the magnitude of what we are talking about, only 350 individuals account for 80 per cent of the debt, amounting to N4.6 trillion.”
In the context of the Nigerian economy, N5 trillion constitutes a vast resource. That amount, which some reports even put at N5.5 trillion, could fund a sizeable chunk of the 2019 national budget of N8.9 trillion. AMCON, the “bad bank” set up by the Federal Government, bought over the non-performing loans of banks during the financial crisis of 2009; it has only been able to partly fulfil its functions. While its intervention was able to revitalise and retool the financial system, it has only been able to recover over N1 trillion from the non-performing loans that were bought over from eligible financial institutions. Failure to recover the debt would amount to the Central Bank of Nigeria underwriting the loss, since it provided the cash AMCON used to repay holders of bonds issued to acquire the bad debts from banks. This is why the government refers to the debt as taxpayers’ money.
Although the government has most times been whining about the need to recover the debts, which could go a long way in boosting the economy, its recent actions constitute by far the most far-reaching step it has taken to match its rhetoric with action. Perhaps this is just what is needed to drive home the point in an environment where people tend to commit financial crimes without any sense of compunction. Earlier actions such as the threat to publish names of debtors have failed to produce the desired result.
It should be noted that it is not just the raising of a task force that engenders the hope of recovery; it is the make-up of the membership that shows government’s sincerity and the resolve to see this through. Aside from the head of AMCON itself, the task force draws its membership from the Economic and Financial Crimes Commission; the Nigerian Financial Intelligence Unit; the Independent Corrupt Practices and Other Related Offences Commission and the Ministry of Justice.
It is also important to take into consideration the role that the judiciary is capable of playing in the debt recovery process, since many of the debtors have been trying to use the justice system to protect themselves. This important role was noted last year by the immediate past Chief Judge of the Federal High Court, Abuja, Adamu Kafarati, at the National Judicial Institute, where he urged judges to throw their weight behind AMCON, whose duty he rightly described as a response to the financial crisis in the country.
If there is any team capable of succeeding in this assignment, it is this task force, given the antecedents of the members; it is a team that has been carefully selected to make the desired impact. In fact, given the amount involved and the length to which the debtors have gone to resist payment, it is just as well that the government has to have recourse to the present course of action. It is long overdue as, in an issue of this nature, the government does not have to show weakness and cannot afford to fail.
The idea of “bad bank” is not peculiar to Nigeria; it is an option that has been tried and tested in other climes with impressive results. Examples of countries that have had recourse to this option include Ireland, Sweden, Finland, Korea and the United States of America. In some of these places, not only have taxpayers’ money been recovered, it has been done in record time with profit to boot. But Nigeria’s AMCON, in close to 10 years of existence, is almost ending up a failure, receiving only N1.2 trillion out of about N6.4 trillion. This should be resisted.
Despite the moves made by the government, what is however baffling is the claim that the same government that is complaining about the high profile debtors is still busy hobnobbing with them. According to Kuru, political office holders, including ministers and lawmakers, are among the 350 debtors implicated in over 80 per cent of the debt. The task force should not hesitate to go after them because, from available evidence, most of them can afford to pay their debts but are simply just not willing to do so; they just believe they can get away with it.