The House of Representatives on Wednesday raised the alarm over alleged “abuses” in the management of the affairs of the Asset Management Corporation of Nigeria, leaving the corporation with a debt profile of over N5tn.
It noted that the “huge” debt had exceeded the corporation’s approved debt ceiling of N800bn by N4.2tn.
The House said if the situation was not rescued urgently, Nigeria was headed for a scenario in which AMCON would no longer be able to perform its statutory role of strengthening the banking industry in the country.
The implication, according to a resolution passed by lawmakers in Abuja, is that the banking sector in the country may return to the “pre-2010 global economic crises, which AMCON was established to cure.”
The House resolved to investigate the debt profile of AMCON and to examine whether the “acquisition and sale of assets, banks, shares and landed property by AMCON was consistent with due process and extant laws devoid of fraudulent practices, and determine the losses, if any, suffered by Nigeria.”
A member from Anambra State, Mr. Gabriel Onyenweife, who brought the matter to the attention of the House, had told members that there was a “geometric accumulation of debts” by AMCON, resulting in a N3.8tn shortfall in its balance sheet.
“This will no doubt endanger the dwindling national reserves put at $30bn since the Federal Government is the guarantor of AMCON bonds as enshrined in Section 27 of the AMCON Act, 2010.
“The House is aware that the accumulation of debts by AMCON in five years was more than the debts owed by the Federal Government to the Paris Club of Creditors in 50 years,” he added.
The lawmaker cited the “not too transparent process” adopted in the sale of Oceanic Bank, Intercontinental Bank, Enterprise Bank and Main Street Bank, as some cases in point, saying that over N2tn was lost in those transactions alone.
The motion further read, “The House is worried that if these practices of AMCON are not urgently addressed, the negative impact on the banking sector which is the soul of Nigeria’s economy, will not only impact negatively but also jeopardise its financial health.
“Also, we are concerned that the disposal of such assets as shares, landed properties, plants and equipment acquired by AMCON was shrouded in secrecy.”
In a separate resolution, the House also observed that there were abuses in the collection of non-oil revenues by Ministries, Departments and Agencies as most of them did not remit revenue to government.
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