Two years ago, when Senator Uba Sani, the governorship candidate of the All Progressives Congress (APC) in Kaduna state, pushed through a major reform of the Asset Management Corporation of Nigeria (AMCON) Act, many Nigerians missed the fine print. AMCON had been set up by the federal government in 2010 to prevent another round of banking failure by “buying” non-performing loans from lenders. While the banks would breathe easy, AMCON would recover the loans mostly by selling debtors’ assets. But, as with everything Nigerian, many big boys began to game the system and basically avoided paying back the loans. For them, life went on as usual.
Yet, AMCON was not supposed to live forever. As an intervention, it was to recover the debts and close shop after 10 years under the “sunset clause”. However, by 2020, AMCON had recovered only a fifth of the bad loans. Some of the debtors are among the high and mighty in Nigeria. These parasites are sucking our blood everywhere in public life. Conniving with bankers, some of the debtors had used overvalued collaterals to secure huge loans. Some used bungalows in their villages as collaterals while owning mansions in Lagos and Abuja. It is not much of a secret that there is a well-oiled conspiracy between the elite of business and power in the underdevelopment of Nigeria.
Sani, the senator representing Kaduna Central — who is also chairman of the senate committee on banking, insurance and other financial institutions — sponsored the AMCON amendment bill which was signed into law by President Muhammadu Buhari in November 2021. The fine print, as I would call it, is that there is now a provision for asset tracing. All assets traceable to a debtor, whether located in Kaura Namoda or Ekeremor, can now become a subject of attachment with the help of a court judgement. The amendment empowers AMCON to take possession, manage or sell all assets traced to debtors, whether or not they were used as security for the loan in default. Fair game.
Luckily, the National Assembly had also passed the Banks and Other Financial Institutions (Repeal & Re-Enactment) Act 2020, which was signed into law by Buhari in November 2020. BOFIA, as it is called, had not been updated for two decades despite the changing realities. The law is now better in tune with modern trends as it also regulates the fintech companies, a new subsector altogether. Quite significantly, the amendment — also sponsored by Sani — provides for the creation of a Credit Tribunal to help improve loan recovery and strengthen the regulatory framework for managing failing or distressed banks. This will hopefully help AMCON recover more of the toxic debts.
Uba, who trained as a civil engineer and holds a master’s degree in finance and a post-graduate diploma in business administration, will most likely be having a sense of fulfilment as AMCON has seen a substantial improvement in debt recovery. Mr Ahmed Kuru, the AMCON managing director, has given encouraging updates on new recoveries, although he also acknowledges the constraint imposed by the attitude of the big debtors who have penetrated the judiciary. Assets worth close to N2 trillion are being protected through judicial processes. The big boys reportedly owe about 70 percent of the outstanding of roughly N3 trillion. They always get away with murder. This is Nigeria.
From what I have read in the media, the courts also give conflicting orders, thereby stalling the recovery processes and frustrating efforts to implement the AMCON law. It is particularly difficult for AMCON to get a court date for its cases. Deposit of judgement sum, which the law stipulates, is hardly enforced by the courts. Chronic debtors still get government contracts and still do not settle their debts. Unsurprisingly, many lawmakers tried to frustrate the amendment because they were also indebted. As we usually say when we want to lament over our problems, it is “only in Nigeria” that chronic debtors ride flashy cars and drink choice wines in public glare without consequences.
Amending BOFIA and the AMCON law, as spearheaded by Senator Uba, to strength the debt recovery process is one of many necessary steps needed to discourage the arrogance and intransigence of the debtors, but the courts must do their part. There are suggestions that AMCON debtors should be barred from transacting business with any government agency. AMCON, it is suggested, should start issuing clearances to those seeking to get government jobs. I would think this is a no-brainer. This one will not require a court order or a lengthy judicial process. I support all laws and administrative measures that will help curb this bad behaviour and sanitise the system.
But if you are thinking what I am thinking, for how long will AMCON continue to carry the dead woods? Are we going to retain AMCON forever? For me, this is the conversation we should be having. AMCON, initially conceived by Prof Chukwuma Soludo when he was governor of the Central Bank of Nigeria (CBN) and established by Mallam Sanusi Lamido Sanusi, his successor, was necessary at the time because many banks were in distress as a result of non-performing loans. Every bank that fails is a threat to the economy. Millions of depositors would lose their savings and thousands of employees would be laid off. In the past, many depositors committed suicide after bank failures.
Worse still, the National Deposit Insurance Corporation (NDIC), which insures bank deposits, was only empowered by law to pay a pittance to the depositors of failed banks. The maximum payable is N500,000 for account holders in a commercial bank, no matter the amount lost (although I am aware of a bill sponsored by Uba to amend the NDIC Act in line with current economic and regulatory demands). AMCON definitely saved jobs and lives in 2010, but there were those who kicked over the moral hazard of rewarding the banks’ corrupt risk management system. The taxpayers ended up with a bill that was close to N5 trillion and many debtors walked away unhurt.
The same problem I have with AMCON running in perpetuity is what I have against interventionist programmes in Nigeria generally. There is nothing like “temporary” in our dictionary, especially when it creates a patronage system and provides loopholes for people to milk. A classic example is the Niger Delta Development Commission (NDDC) which was conceived to help develop the oil-producing states in what was supposed to be an attempt by the federal government to address decades of neglect. Normally, this is a good idea. When the people see roads being built by a federal agency, it should assure them that their resources are not being tapped in return for anything.
But if you say something is an “intervention”, is it supposed to be forever? An agency like NNDC is supposed to have a sunset clause as well. Some of the funds being pumped into the commission can be paid directly to the states as budgetary support to carry out developmental projects. Although the states get 13 percent derivation payment from oil revenue and make enormous internally generated revenue from oil-production activities, there is nothing wrong if the federal government and oil companies decide to augment their budgets. But NDDC, as it operates, is purely for political patronage. It is an oil well on its own and any attempt to disband it will be heavily resisted.
The same goes for the Amnesty Programme. The original concept, as President Umaru Musa Yar’Adua told us in 2007, was to rehabilitate and reform youths who were engaged in militancy. The idea was to make them lay down their arms and embrace a process that will empower them with skills and make them reintegrate into the society. It was not supposed to be forever and ever. Today, the Amnesty Programme has become one of the warmest honeypots. It is producing multimillionaires and billionaires in the name of “maintaining the peace” in the “neglected” oil-producing region. Any attempt to end the Amnesty Programme will be met with full force.
Sadly, when you create one for a part of Nigeria, you have to create for another. After NDDC, we went on to create the Hydroelectric Power Producing Areas Development Commission (HYPERDEC) for states hosting power dams. We created the North East Development Commission (NEDC) because of Boko Haram. Every region started sponsoring a bill to create theirs: South East Development Commission, South West Development Commission, North Central Development Commission, and North West Development Commission. These ones did not sail through, but the politicians knew what they were doing. It is more about patronage and less about development.
All these are governance errors. You do not really need a commission to deliver development. Otherwise, we would need to set up a Nigeria Development Commission (NDC) for the country. However, the president can create development initiatives for areas that need special attention, such as the Niger Delta, and the budgets can be managed under the relevant ministries. Creating more bureaucracies and expanding the frontiers of patronage can only balloon the costs of governance and deliver less positive outcomes — except there is the tenacity of purpose. Alas, getting rid of these patronage centres is virtually impossible. It is like seizing the ATM cards of the lords of the manor.
While I commend Uba’s efforts in trying to help sanitise the financial sector via legislation, we still have to discuss the fate of government interventions generally. We need to think carefully at the stage of design to avoid abuse. It is a design error in governance. We also need to assess the impact of the existing ones and tweak things, where necessary, for better outcomes. Good enough, the new BOFIA has a provision for “bail-in” — which shifts primary intervention to a bank’s shareholders and creditors before recourse to “bail-out” with public funds. I agree that we have made progress with the legislative reforms — but other things must fall in place for us to get the desired results.
AND FOUR OTHER THINGS…
COLLECT YOUR PVC!
It is good to hear that 93 million Nigerians have been registered to vote in the 2023 elections. That means we have nearly 10 million new voters compared to 2019. PVC collection was 87% in 2019. We still have to wait to know how many will pick theirs this time around. While 72.8 million collected PVCs in 2019, only 29.3 million (less than half) came out to vote. In the end, President Muhammadu Buhari was re-elected with 15.1 million votes. We clearly have two major tasks ahead immediately: persuading registered voters to pick their PVCs and encouraging them to come out to vote. If PVC collection and voter turn-out do not surpass those of 2019, that would not be palatable. Watching.
I was moved to tears seeing Dr Datti Baba-Ahmed, vice-presidential candidate of the Labour Party, break down on TV over the insults being targeted at his late father since he joined politics. It is so unkind. The truth is that some Nigerians are so badly behaved that they think all is fair. They can say anything, no matter how vile, in the name of politics. President Muhammadu Buhari has been called unprintable names since 2015. President Goodluck Jonathan’s wife was called “she-ppopotamus” in a body-shaming binge in 2013. These are people’s parents. I may not be a politician, but I do not accept that politics should be played like this. There should be a line we must never cross. Dirty.
Empress Njamah, Nollywood actress, is the latest victim of revenge porn. Her ex-lover allegedly leaked her nudes in a WhatsApp group he created for bloggers. Sharing nudes is one of the silly things lovers do when they think they are madly in love. But what people do in private remains their business. Now, there is a criminal aspect to revenge porn. Under the Cybercrime Act, the ex-lover and those who broadcast the images could be criminally liable. So, it is not enough that the ex-lover has reportedly behaved like a kid to take his pound of flesh. Also, I implore Nigerians to be careful with the way they help amplify things that can push people to the verge of suicide. Appalling.
REST IN PEACE
The last time I saw Ms Peace Anyiam-Osigwe, founder of the Africa Movie Academy Awards, she accused me of abandoning my sister. We laughed over it and I promised to turn a “new leaf”. I had not the faintest idea that we were never going to see again. That is why we are mere mortals. I did not have the opportunity to turn a new leaf. Truly, every minute should count in our lives. Nobody knows tomorrow. The Nollywood filmmaker has left glorious marks on the creative industry in Nigeria. At a couple of months shy of her 54th birthday, she definitely did enough to immortalise herself and her memory will always be blessed in our hearts. She only went ahead of us. Adios.