Experts canvass for merger of AMCOM, NDIC to save banks

More voices have been added to calls by experts that the Nigerian government should merge the Asset Management Corporation of Nigeria (AMCON) with any other efficient establishment to save banks from going under.

Former Director-General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, on Wednesday, suggested merging AMCON with the Nigeria Deposit Insurance Corporation (NDIC) as an end to inefficiency in the financial sector.

Financial experts said failure of government to salvage the situation urgently would see to about 20 per cent of the 25 banks in Nigeria being insolvent due to bad debts.

It would be recalled that following the increasing rate of bad debts under the supervision of AMCON, rising to N3 trillion since inception in July 2011, only about 15 per cent of such debts were recovered in the past five years.

Though the asset corporation is by the Act establishing it a baby of the CBN, there have been occasions when the apex bank had publicly expressed regrets that rather than the toxic debts reducing, there has been a continuous increase in volume.

In August, for example, AMCON was once more saddled with the load of taking over bad debt from the Skye Bank, pending emergence of buyers of the bank.

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There was also a court ruling in September 2016 against AMCON for payment of N20 billion in favour of Kapital Oil, for violation of rights, following shoddy deal all in a bid to recover some loans the oil service company secured from a consortium of banks.

Analysts also recall how appointment of a manager to oversee the running of Aero Contractors could not save the huge indebted airline from winding up.

Okereke-Onyiuke added: “NDIC and AMCON can do the work effectively. After the merger, practicing bankers should be brought onboard to work together. There should be reduction of staff and those available should be given the power to work.

“This will save Nigeria a lot of money. We have to build institutions for government to create wealth. People just go to government to waste money. During our time in the capital market, we created wealth for government”, she noted.

But in his view, the Delta State Commissioner for Water Resources, who was former managing director of the defunct Fortune Bank Plc, Mr. Fidelis Tilijie, sued for outright replacement of both AMCON and the NDIC with a new concept in finance management for the country to come out of its high debt burden leading to banks’ collapse.
By Emma Eke….

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