Asset Management Corporation of Nigeria (AMCON) is a body established by the Act of the
National Assembly of Nigeria
National may refer to:
Common uses
* Nation or country
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in July 2010 with an intended 10 years lifespan. The concept is in consonance with the operation of the
National Asset Management Agency
The National Asset Management Agency (NAMA; ga, Gníomhaireacht Náisiúnta um Bhainistíocht Sócmhainní) is a body created by the government of Ireland in late 2009 in response to the Irish financial crisis and the deflation of the Irish ...
of the
Republic of Ireland
Ireland ( ga, Éire ), also known as the Republic of Ireland (), is a country in north-western Europe consisting of 26 of the 32 Counties of Ireland, counties of the island of Ireland. The capital and largest city is Dublin, on the eastern ...
and
Malaysia Pengurusan Danaharta
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
.
The body acted as the buyer of banks for the Nigerian Government by acquiring the non-performing loans (NPL). The original
book value
In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. T ...
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 10 banks 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. In 2013, the management of the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
through their report advised the Federal Government of Nigeria to stop the operations of AMCON in order to avoid future financial challenges. The founding Managing Director of the organisation was sacked by President
Muhammadu Buhari
Muhammadu Buhari (born 17 December 1942) is a Nigerian politician and current president of Nigeria since 2015.
Buhari is a retired Nigerian Army major general who served as the country's military head of state from 31 December 1983 to 27 A ...
because the presidency believed that sales of acquired banks lack transparency
Operations
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 returned to 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
House of Representatives of Nigeria
The House of Representatives is the lower chamber of Nigeria's bicameral National Assembly. The Senate is the upper chamber.
The House of Representatives has 360 members who are elected in single-member constituencies using the plurality ( ...
in his submission in 2015, queried the excess debt accumulation by the body
External links
Official Website
References
{{Reflist
Banking in Nigeria