Experts in the financial sector have warned against the amendment of some sections of Asset Management Corporation of Nigeria (AMCON) Act.
Recently, the Clerk, House Committee on Banking and Currency, Mr. Yilji Yakubu, had in a letter, invited the management of AMCON to appear at an investigative hearing at the National Assembly Complex this week.
The letter also requested that the corporation should produce a memorandum on any area or section of its Act that need to be amended to further “to bring in conformity with the provision of the constitution of the federal republic of Nigeria as amended.”
Commenting on this development, an analyst at Profund Securities Limited, Mr. Chijioke Obiagwu, said that the move might destroy the gains that had been recorded in the banking industry, facilitated by the intervention of the corporation.
Obiagwu said, “This should not be coming up at a time when there are strong indications that the banking crisis is over and when we are expecting that the gains of banking reform will have a positive effect on the stock market. We all saw the positive earnings announced by banks in first quarter 2012 and all these were as a result of AMCON’s intervention. Today, non-performing loan (NPL) in the industry is below five per cent.
“So, it will not be proper for the House of Representatives to start talking about tampering with the AMCON Act. Today, the environment is better and foreign investors have noticed that our banks are now well capitalised and very liquid.”
On his part, Managing Director of an Financial Advisory firm, who spoke on condition of anonymity said that the move would be affect confidence in the system.
“I keep wondering what the whole idea is about. You know AMCON was established to clean up banks’ NPLs and it has lived up to that. So what amendment(s) are they talking about? I think the Act should be left the way it is, especially now that the corporation is talking about debt recovery,” he added.
In the same vein, the Registrar/Chief Executive Officer, Institute of Chartered Economists of Nigeria (ICEN), Mr Peter Ikpamejo, advised the lawmakers not take any hasty decision on the AMCON Act.
He said: “I think what the House should do is to engage professionals to properly look at the AMCON Act and advise them on what should be done. The AMCON Act should not just be a political issue.”
The House had in November 2011, deliberated on the motion titled: Expenditure of Public funds by the Central Bank of Nigeria (CBN) and AMCON and had adopted a resolution mandating the committee to conduct an investigating hearing on the sources of funds, expenditures and intervention of the apex bank and the corporation in the various areas and determine whether or not they conform to the constitution of the federal republic of Nigeria.