LAST July 19, President Goodluck Jonathan made an important move towards stabilising the nationâ€™s economy, by signing the law creating the Assets Management Corporation of Nigeria, AMCON.
Experts have opined that the large-scale distress that has threatened the financial system in the past two years would have been minimised if AMCON existed.
The President said the Corporation indicated governmentâ€™s determination to protect the interests of depositors, creditors and other stakeholders in the Nigerian financial system and revamp the economy.
According to him, AMCON would enhance the stimulation of the financial system and the economy at large by providing liquidity to the banks.
It will buy their toxic assets and non-performing loans, recapitalise banks surviving on the intervention of Central Bank of Nigeria, CBN, and provide greater opportunities and access to refinancing.
These are expected to increase confidence in the banks and the financial system, curb job losses in the sector, improve the systemâ€™s credit rating and ultimately restore confidence in the capital market.
The creation of this law got expeditious attention from CBN, Federal Ministry of Finance and the National Assembly. Already, 24 banks have committed 0.3 per cent of their balance sheet worth to an AMCON sinking fund over the next 10 years starting from December 2010.
CBN, Nigerian Deposit Insurance Corporation, and other parties will make up the remaining N1.5 trillion AMCON requires for its operations.
If AMCON works, it would relieve the financial sector of its toxic assets, and enhance the sectorâ€™s ability to provide the services other sectors would require to revamp the economy.
Sectors that could benefit from a vibrant financial sector are agriculture and manufacturing which would create needed jobs.
With the benefit of experience, it is important for Nigerians â€“ the mass media, civil society groups and Labour â€“ to be vigilant and monitor the operations of AMCON to save the Corporation from abuses by government officials and politicians.
Minister of Finance Mr Olusegun Aganga has rightfully observed, â€œIf it is done badly we all get into troubleâ€.
The first signs of governmentâ€™s intentions for AMCON will be evident in how the two superintending government agencies â€“ Federal Ministry of Finance and CBN â€“ constitute the board and management of AMCON.
Political considerations can ruin AMCON from inception. AMCON must not be controlled by ethnic, sectional or other partisan speculators.
The board and management of the Corporation must be Nigerians of proven integrity with track records of competence, with global exposure at commanding heights of similar ventures.
The CBN and FMF must be mindful of the onerous mandate of AMCON and select first class people to work there while they exert the necessary oversight responsibilities to ensure that the company delivers the expected results.
The signing of this Act into law is only a small part of the challenge. The big hurdle lies in its proper operations.
Years later, Nigerians should be proud that a solution was found to instability and frequent distress in our financial system.
It is impossible to deliver on this expectation if AMCON operates like any of the numerous government agencies that only add to the burdens of running the State.