AMCON Set To Redeem N1Trn Bonds But Critics Say AMCON Remains A Drainpipe

CBN Gov. Lamido Sanusi Lamido and Mustafa Chike-Obi- Managing Director/CEO, AMCON

The Governor of the Central Bank of Nigeria (CBN), Mr. Sanusi Lamido Sanusi, says the Asset Management Company of Nigeria (AMCON) is set to pay-off N1 trillion of the entire series 1, 2, 3, and 4 bonds held outside of the CBN, on December 30.

According to him, the CBN is already in custody of the said N1 trillion and all those who own a stake in the said series will be paid either by cash or Treasury Bills.

Mr. Sanusi made the declaration in Abuja today during the signing of an agreement between the apex bank and AMCON on the financing of N3.8 trillion worth of bonds over a period of 10 years.

The CBN governor also disclosed that by October 2014, AMCON would have written off another N1 trillion worth of bonds, thus making the CBN the only creditor of AMCON. This, he noted, is a credit positive for Nigeria.

Prior to signing the agreement, which he said was the outcome of bilateral negotiations between the two bodies, Mr. Sanusi gave a background to the establishment of AMCON in 2010, stating that the corporation was instrumental to addressing the banking crisis brewing in Nigeria at the time.

“Without AMCON, we would never have been able to resolve the financial crisis,” he stated.

He therefore expressed appreciation to President Goodluck Jonathan; his predecessor, the late Umaru Yar’Adua; the Minister of Finance, Dr. Ngozi Okonjo-Iweala; and her predecessors, Olusegun Aganga and Mansur Muhtar; as well as other financial advisers, for their cooperation and the roles they played in the establishment and operation of the AMCON project.

Sanusi noted that CBN was aware of the concerns by the Federal Ministry of Finance that the amounts involved in the AMCON project could end up on Government’s balance sheet. He, however, assured that the apex Bank, AMCON and financial institutions were working hard to protect the Government’s balance sheet.

Sanusi also expressed optimism that the collaboration between the Bank and the Federal Ministry of Finance will continue to yield fruitful results.

While thanking the National Assembly for its support in ensuring the passage of the AMCON Bill into law in July 2010, he appealed to the legislators to finalize work on the AMCON Amendment Bill in order to put the agreements reached on AMCON on a firm legal footing.

He equally commended the management team of AMCON, which he described as the best brains put together by he and Mr. Aganga.

The highpoint of the ceremony was the signing of the agreement between the CBN and AMCON.  Mr. Sanusi signed for the CBN while Mr. Mustafa Chike-Obi, the Managing Director/Chief Executive Officer of AMCON, signed for the company.

 Despite Mr. Sanusi’s optimism today, AMCON has been serially accused of bailing out economic criminals by accepting assets or collaterals that are well below the values of their debts.

 The International Monetary Fund (IMF) also recently recommended that AMCON be scrapped because of the massive corruption perpetrated by the agency.