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Asset Management Corporation of Nigeria

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Asset Management
Corporation of Nigeria
Agency overview
Formed11 July 2011
JurisdictionNigeria
Headquarters3rd Floor, Murjanatu House,1, Zambezi Crescent,Off Aguiyi Ironsi Street, Maitama - Abuja.
Employees184
Annual budget₦150 billion estimated cost per annum
Agency executive
Key document
  • AMCON Act 2010
WebsiteOfficial Website

Asset Management Corporation of Nigeria is a body established by the Act of the National Assembly of Nigeria of July 2010 with an intended 10years life Span. The concept is in consonant with the operation of the National Asset Management Agency of the Republic of Ireland and Malaysia Pengurusan Danaharta bid.[1] The body acted as the buyer of banks for the Nigerian Government by acquiring the Non-performing loans. The original book value of the acquired NPLs was ₦4.02trillion at a price of ₦1.76trillion with a commensurate issue of Zero Bond for the NPL acquired.

Background

As a result of global financial crisis and domestic events, the federal government of Nigeria through the operation of Central Bank of Nigeria conceptualized the idea for the establishment of a body that will prevent the looming financial crisis in the country. At the time of the establishment of this corporation, the body identified 10 Banks with crisis in system asset and responded by the injection of ₦736 billion liquidity to buy up their assets. Among the 10Banks only three banks were unable to meet up and were finally acquired by AMCON and tagged as Bridged Banks: Mainstreet Bank, Keystone Bank and Enterprise Bank.[2][3] In 2013, the management of International Monetary Fund through their report advised the Federal Government of Nigeria stop the operations of AMCON in order to avoid future financial challenges.[4] The founding Managing Director of the Organisation was sacked by President Muhammadu Buhari because the presidency believed that sales of acquired banks lack transparency[5]

How AMCON operates

The Act establishing the body permits, as part of its operation to set aside a sinking fund with an annual ₦50 billion contribution by the Central Bank of Nigeria and 0.3% of total asset value of all the commercial banks over the useful life of the corporation. The money from this fund would be used to purchase FG securities and the returns from this investment will be ploughed back into the account and then redistributed among the contributing commercial banks. The fund is administered by consortium of members from the participating banks which will be rotated annually to allow even participation among the participating banks. The Federal House of Representatives in his submission in 2015, queried the excess debt accumulation by the body[6][7]

References

  1. ^ "Banking Reform in Nigeria:Aftermath of the 2009 Financial Crisis". yomi makanjuola. pp. 2–10. Retrieved 3 December 2015.
  2. ^ Chike Obi. "finally AMCON transfers Mainstreet Enterprise to skype Heritage Banks". This daylive. Retrieved 3 December 2015.
  3. ^ "amcon hands over Enterprise,Mainstreet banks to new owners". daily sun. Retrieved 3 Dec 2015.
  4. ^ Omoh Gabriel. "why Amcon operation winding down is necessary". Vanguard. Retrieved 3 December 2015.
  5. ^ jafar jafar. "why Buhari fired amcon MD Mustafa Chike Obi". premium times. Retrieved 3 December 2015.
  6. ^ Kemi Yesufu and Fred Itua. "House to probe N5tri Amcon debt, FCT land swap deal". the Sun. Retrieved 3 Dec 2015.
  7. ^ "Nigeria President dissolves Assets Management Corp". AllAfrica. Retrieved 3 December 2015.
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