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In The Beginning

The setting up of an Asset Management entity formed part of the 14-point agenda of the Central Bank of Nigeria consolidation exercise in 2004 during the era of Charles Soludo as CBN Governor. However no concrete step was taken.


Sometime in 2008, the Central Bank of Nigeria (“CBN”) conducted special examination into the books of the several banks in Nigeria. The examination revealed that more than half of Nigeria banks were in distress due to amongst other things, a high number of non-performing loans (NPLs).


 To save Nigeria banks from this dire situation, the Nigeria government came up with a special purpose statutory corporation to buy over the non-performing loans. Thus the National Assembly passed the Asset Management Corporation of Nigeria Act in July 2010 (“AMCON Act” or”the Act”).


But in its relatively short life span, there is currently a proposed amendment to the Act before the National Assembly.


And Then…
The Act established the Asset Management Corporation of Nigeria (“AMCON” or “the Corporation”) for the purpose of efficiently resolving the non-performing loans (“NPL”) assets of Nigerian banks.


AMCON has all the incidences of incorporation (a body corporate) with a common seal, perpetual succession, and can sue and be sued in its corporate name. It can acquire, hold and dispose of movable and immovable properties.
AMCON has a share capital of 10 billion naira which is fully subscribed to by the Federal government. Currently the authorised share capital is subjected to stamp duties and registration. But if the amendment comes to light, this will.


By Section 60 AMCON is exempted from the provisions of the Capital Gains Tax Act, Companies Income Tax and Stamp Duties Act. This seems to be in conflict with the provision of Section 2 which allows for the authorised share capital of AMCON to be subjected to stamp duties. 


Does it Have a Structure?

AMCON has a Board of Directors for AMCON responsible for the attainment of its objects, formulation of its policies and its general supervision.
All the Board members of AMCON are appointed by the President of the Federal Republic of Nigeria, subject however to confirmation by the Senate. The Board is composed of a Chairman of the Board, a Managing Director, 3 Executive Directors, and 5 Non-Executive Directors.

AMCON has a Secretary, who must be a legal practitioner of at least 10 years cognate experience.


It’s Powers?[1]

It has power to issue bonds or debt instruments as consideration for NPLs they acquire, borrow money or secure the payment of money through issuing of debentures, initiate/participate in any enforcement, re-organisation, restructuring, programme of arrangement or other compromise; compromise any claim, forgive or forbear any debt or obligation; engage from time to time the services of consultants.


It Has Special Powers of AMCON Too[2]

Its special powers are: it can act as or appoint a receiver for a debtor company whose asset has been pledged as security for an acquired NPL; it can apply ex parte for an order of court granting possession to it to take up the property of a debtor; it apply ex parte for an order of court freezing the account of a debtor and in these two instances the order is deemed to have lapsed if it does not commence debt recovery action against the debtor after14 days; it can also apply for a receiving order against the debtor, where there is a court judgment against the debtor in its favour of AMCON and the judgment sum is not paid within 30 days; it can further apply for a winding up order after 90 days of debt recovery judgment by a court.

Jurisdictional Issues
The Federal High Court (“FHC”) has exclusive jurisdiction over causes brought by AMCON or against it. By Section 43(2) of the Act a 30 days notice must be issued on AMCON before any action in court can be brought against it. By Section 43(1) of the Act, AMCON is absolved of liable for any breach of contract, breach of trust, misrepresentation or any wrong committed by a bank. In such case the bank will be liable.

Who Regulates its activities?

Basically, it is the CBN and the Ministry of Finance that regulates AMCON. The CBN is empowered to issue guidelines guiding its activities. It also nominates and appoints some of AMCON’s directors.

The Amendment of the AMCON Law

There is currently before the National Assembly, a bill to amend the AMCON. The bill just recently scaled through second reading at the National Assembly and has proceeded to committee stage. The amendment seeks to amongst others empower AMCON to acquire assets which are subject to litigation (of course except there is court order against doing so); by the amendment AMCON will no longer be subject to the Stamp Duties Act (meaning its authorised capital will no longer be subjected to stamping) and the Investments and Securities Act (especially for the regulation of its issued bonds). The writer thinks this will not affect landed properties that AMCON may acquire. The amendment will also expand the powers of an AMCON appointed receiver; it further institutionalises the Banking Sector Resolution Cost Fund[3]created by the banks and CBN. Under the amendment, the resolution cost fund will now be administered by an eight member Board of Trustees for the benefit of AMCON.

As you may know, the setting up of AMCON is not an end in itself, rather it is a means to an end. That end is to clear up toxic assets of banks. The tone of Section 47 of the AMCON Law shows that it will one day be dissolved. It is our hope however that by the end of its lifespan, it would have helped secured the long term future of Nigerian banks- and banks with a clean bill of health.

[1] Section 6 of the AMCON Act.
[2] Section 48-53 of the Act.
[3] The Resolution Cost Fund is a contributory account where all banks are required to pay levies into for benefit of AMCON. AMCON is to use proceeds of the Resolution Cost Fund to defray its liabilities.

About the author

Nigerian Law Today

NLT’s mission is to take legal-content writing to the next level in Nigeria by leveraging legal expertise and technology. We publish fresh, original, and insightful articles on areas of law we cover.

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