The Asset Management Corporation of Nigeria (AMCON) is being shut down as soon as possible thanks to efforts by the federal government.
This was revealed by Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, to journalists over the weekend, according to BusinessDay.
The move, according to the finance minister, aims to relieve financial pressure on organizations like Access Bank, Zenith Bank, Guaranty Trust Bank (GTB), United Bank for Africa (UBA), and several others.
What is AMCON charges?
AMCON was established in 2010 in a bid to stabilize the Nigerian banking system by efficiently resolving the non-performing loan assets of the banks in the economy.
To achieve this, banks were initially required to pay 0.3% of all assets into the sinking fund. In 2013 it was raised to 0.5% of total assets (and 0.3% of contingent liabilities).
The AMCON charges have been source of concerns for banks shareholders with complains that it is discouraging investment in bank stocks.
Wothappen in an earlier report revealed that eight banks incurred N112.15 billion AMCON charges in their books
While discussing the economic plan of Tinubu, Edun said:
“On AMCON work is being done to ensure as much as possible that AMCON meets its mandate of winding up in the very near future.
“So, it is a question of financial engineering is a question of making arrangements for sidedly taking care of the liabilities.
“And those responsible include the banking system which has a portion to pay, as well as central bank and other stakeholders.”
The challenges ahead
Ahmed Kuru, AMCON’s managing director, disclosed recently that there is a total of N4.664 trillion liability burden in terms of cash and sale of assets.
According to him, about 350 obligors account for N3.957 trillion, which is above 84 per cent of the total outstanding amount.