The Federal Government has set up a task force to recover about 5.5 trillion naira ($15 billion) of bad loans taken over during a banking crisis more than a decade ago.
The loans are owed to the Asset Management Corp. of Nigeria, known as Amcon, which bought them over during the 2009 banking crisis, the Abuja-based presidency said on its Twitter account Tuesday. The group includes the Economic and Financial Crimes Commission, the Nigerian Financial Intelligence Unit and the Independent Corrupt Practices Commission, it said.
The amount owed is almost 80% of the West African nation’s revenue target for 2019 and 62% of planned spending by President Muhammadu Buhari, amounting to 8.9 trillion naira.
Nigeria’s central bank will bear the loss if the loans are not paid back by debtors as it provided the cash Amcon used to repay holders of bonds that were issued to acquire the bad debts from banks.
About 67% of the outstanding debt is owed by 20 individuals or entities, the presidency said, citing Amcon Chairman Muiz Banire.
Modeled on organizations including Ireland’s National Asset Management Agency Ltd. and Korea Asset Management Corp., Amcon used bonds to bail out 10 lenders and buy more than 12,000 loans from industries including aviation, gasoline marketing and manufacturing after the 2008-09 oil price crash. It’s so far recovered 1 trillion naira, Amcon Chief Executive Officer Ahmed Kuru said last week