THE bad news about the N2.37 trillion debt Assets Management Corporation of Nigeria, AMCON, now bears, is neither the weight of the debts nor the fact that its results would be in the red for some time.

Nigerians should be more concerned with AMCON not falling into the same mode that has seen the Central Bank of Nigeria, CBN, and the Nigerian Deposit Insurance Corporation, NDIC, fail to regulate unwholesome activities that make banks major obstacles to economic growth.
It was pathetic listening to the AMCON’s explanations of the deficit. The summary was that AMCON under-estimated the depth of bank debts, it was also able to recover N85 billion of more than N1 trillion debts of banks.

The disappointment is that AMCON, promoted as the last hope for dealing with toxic bank loans, is sounding much like CBN, under whose watch the banks went into this morass.

Whatever happened to the collaterals used in securing the loans? What about strict CBN regimes on loans? Why has nobody been prosecuted over slack regulations that produce banks that are centres for distributing patronage disguised as loans?

AMCON is CBN in another garb. It, like CBN, has continued the four-year-old routine of announcing prospective buyers for banks that CBN first failed to supervise well and finally drained public resources through, claiming it was re-capitalising them.

What is fantastic about finding buyers for banks? Could the announcements not wait until the deals are finalised? Would AMCON differ from CBN by allowing the former owners of the banks to re-capitalise them?

Banks are now a drain on the economy. The Ministry of Finance gave a waiver of billions of Naira to stock broking firms without waiting for the court cases against them for using marginal loans to shore up bank stocks. The money could have been used to address more pressing matters.

Some of AMCON’s burden comes from those loans. The forgiveness granted the stock brokers comes at public expense, just like the trillions of Naira CBN wasted in running banks their owners should have re-capitalised, to clear a mess they created in connivance with unscrupulous CBN officials.

Mustapha Chike-Obi, AMCON Managing Director, promises to recover the debts. We wonder what is stopping him.  CBN’s poor supervision that caused huge, bad bank debts cannot be used as excuse to stop banks from lending, one of the most vital ways they contribute to the growth of the economy.

It is no longer feasible to throw public funds at banks their former owners want back. Only the CBN’s haughtiness stops the search for more robust ways of restoring the banks to stability and saving the economy from further quakes.