An independent body should be empaneled urgently to take a second look at the claims filed to AMCON as the basis for drawing taxpayers’ money five years ago. This should not take eternity. The true status of the debts claimed has to be established. Not until this is determined can we hope such companies would be able to pay up what they truly owe before thinking of consolidating and returning to profitability.
By definition and operation, an interventionist agency should engage itself more with the back-room work. It is a job for the sober, not the brash or the easily excitable hustling for a mention on the front-page of the tabloid.
So, when agents of an organ like the Asset Management Corporation of Nigeria (AMCON) begin to speak in a manner that shows no restraint or act in a way that’s unguarded, the rest of us should worry indeed. A statement attributed to the AMCON boss, Ahmed Kuru, while making a presentation before a senate committee recently is a classic example of how anyone wearing his shoes should not speak in the public.
Heaven, he sensationally declared, is about to fall because AMCON is left to bear the crushing yoke of over N5 trillion non-performing loans, while the debtors are busy living large and junketing around the world in private jets. If he had his way, Kuru would probably not mind the extreme option of having everyone rounded up and summarily committed to jail if only to cash all the outstanding debts.
True, the word ‘profligacy’ would today be inadequate to describe the lifestyle of some of our business moguls, who seem incapable of separating profit from working capital. But the fact that we have a few bag eggs is not enough for AMCON to make such a sweeping generalisation that lumps the wolves and the lambs together. It is sad enough if, whenever he finds himself on foreign soil, all President Buhari talks about are stories that injure the pride and deflate the dignity of Nigerians sojourning abroad. It will be going too far if public agencies also take liberty now to criminalise all loan-takers at home.
To begin with, with the quantum of public resources already sunk into the enterprises at issue, one would assume the nation already pre-qualified as part-owner. Shouldn’t commonsense then dictate circumspection in the way you go about “naming and shaming”, lest you inadvertently end up eroding the value of the assumed equities? Making reckless statements can only fetch one dividend: inflicting further damage on the brand value of the listed concerns. It shakes confidence in the market. Who will then buy when AMCON is ready to sell?
With specific reference to Nigeria’s financial crisis of 2008/9, nothing has so far been done to address the widespread allegations of figures being sexed up by some unscrupulous banks once signals came that the Federal Government was contemplating bail-out for distressed businesses.
When the agency announced the take-over of AERO Contractors last week with a song and dance, it was only playing to the gallery. It is public knowledge that beginning from September 2012, AMCON had taken over the operations of the airline as well as managed its cash-flow. So, technically speaking, it should bear full responsibility for the airline’s balance-sheet in the past three years. If it was that easy, why hasn’t AERO been nursed back to full financial health by now, having been under AMCON’s “intensive care” all this while? If the accounts are still in red, how appropriate is it then for the care-taker to still award self pass-mark in the circumstance?
For the avoidance of doubt, this is not a defence of those responsible for running aground an institution once touted as the epitome of efficient management in the aviation industry. Indeed, with an illustrious pedigree dating back to the eve of Nigeria’s independence, AERO was once what every airline wanted to be: efficient, respectable and profitable. But along the line, it was either that the management derailed on account of cowboys taking over its reins or it was simply infected by the peculiar Nigerian disease: profitability eroded by toxins under an unbearably usurious climate.
But the big question is: how genuine are the figures bandied by AMCON from the outset? In financial circles today, stories are told of all manners of dirty deals hastily concluded before public funds were shared out as bail-out under AMCON’s watch five years ago. To be sure, the trend is not peculiar to Nigeria. Similar sharp practices were reported even in the United States in 2008/9 after the Obama administration announced a massive stimulus package to mitigate the financial pestilence inflicted by the global mortgage crisis. After the bubble burst, the pervasive culture of tardiness in the US banking sector was exposed. In many cases, banks had no records to prove just how much mortgage-takers owed.
Eventually, federal investigators discovered that banks had resorted to an ingenuous design called “robo-signing” in a systemic cover-up. It simply referred to hiring someone to sign hundreds of fake affidavits in the name of mortgage-takers! Of course, that formed the legal basis through which many poor Americans were made to forfeit their homes.
With specific reference to Nigeria’s financial crisis of 2008/9, nothing has so far been done to address the widespread allegations of figures being sexed up by some unscrupulous banks once signals came that the Federal Government was contemplating bail-out for distressed businesses.
As the stories go, what many bank CEOs simply did following the reports was to compile all their toxic loans (often without any collaterals!) and transfer these to the accounts of businesses favoured to be on the list of companies being proposed for bail-out! Given the rush with which the exercise was eventually carried out and the endemic lack of rigour for details, no one seemed to have bothered to verify the claims before humongous public funds were shared out as elixir to the companies at the point of death then. The CEOs of the benefitting companies were all too happy at the prospects of being spared EFCC’s cold kiss to raise a finger of protest against the skeletons surreptitiously dumped in their closets. Alas, six years later, the ghosts have now returned to haunt them. This perhaps explains why most businesses currently under AMCON’s watch appear primed to fail: the colossal debts ascribed to them are simply unsustainable.
Overall, truth be told, the Nollywood actors currently calling the shots at AMCON today have themselves become part of the problem with what seems a carnal obsession to impress President Buhari. Perhaps to save their jobs. I cite just one example. In its latest “name and shame” parade, they listed Ifeanyi Uba among the delinquent debtors who must be held by the scruff of the neck to pay up or heavens will fall. But interestingly, the same AMCON, before our very eyes late in 2014, issued Uba a clean bill of health having “agreed with other stakeholders to move forward”.
As against the aforementioned AMCON’s sweeping statement, which tends to cast the nation’s entire business community in bad light, special case should be made for the conscientious ones who, I dare say, are in the majority. For Nigeria to survive economically, we need to create more Adenugas and Dangotes for the future.
Then, Goodluck Jonathan was still president and Uba, a smart dude, had ingenuously floated Transformation Ambassadors of Nigeria (TAN), which became the frontline campaign platform for GEJ’s reelection bid. After every rally he hosted on Jonathan’s behalf, Uba was often trailed by salacious tales of dollar rain. Just where did that come from? Earlier, Uba’s Capital Oil was taken over by AMCON over its jaw-dropping exposure running into tens of billions of naira, apart from another hefty N20bn allegedly owed Cosmas Maduka, the Coshcaris boss. But once Uba started chanting “TAN” all over Nigeria on GEJ’s behalf, insulting the intelligence and sensibilities of all decent citizens of Nigerians in the process, these same characters at AMCON hardly felt any shame at all in coming out then to tell the nation that em, em, em Uba was free to return to his swivel chair at Capital Oil. Just like that! Of course, tens of billions of public funds had already exchanged hands.
Indeed, if Jonathan were in power today, it is doubtful if AMCON would have had the balls to put Capital Oil on its latest scroll of dishonour. It is a reflection of the peculiar ethical principles that have defined AMCON’s operations over the years. One sincerely hopes Buhari still has the presence of mind today to see through this charade.
As against the aforementioned AMCON’s sweeping statement, which tends to cast the nation’s entire business community in bad light, special case should be made for the conscientious ones who, I dare say, are in the majority. For Nigeria to survive economically, we need to create more Adenugas and Dangotes for the future. The point to be made therefore is for the political establishment to be more circumspect in the way and manner it relates with businesses.
If anything at all, the Nigerian entrepreneur deserves to be pitied for operating in an environment that’s everything but friendly. I ran a business before. So, one is speaking from hands-on experience. Banks’ shylock interest rates make access to capital near impossible. On top of that, the investor has to agonise over how to generate own power because of irregular public electricity supply.
A recent survey in Nigeria, Kenya and South Africa has also shown that skills and work ethic are increasingly major concerns among employers. That is apart from a plethora of other problems from inconsistent government policies to multiple taxes, corruption and other post-production problems.
In short, no matter their shortcomings, the truth is that our entrepreneurs remain the live-wire of the national economy. Otherwise, imagine the telecoms sector in Nigeria today without Dr. Mike Adenuga Jnr. When GSM made its debut in Nigeria in 2001, we were initially told that per second billing was not feasible by the pioneering MTN until 2006 for “technical reasons”. Of course, consumers were mindlessly swindled through dropped calls, until Globacom introduced per second billing and put an end to that nonsense.
Adenuga does not just provide direct jobs for tens of thousands of Nigerians through a portfolio of investments spanning telecoms, banking and oil and gas; he is also a tireless philanthropist who however prefers to sow kindness across the country and continent quietly. To say nothing of the boost he continues to offer another critical sector in the economy – the Nollywood/entertainment industry. By investing a fortune here in the form of corporate endorsements, the material condition of artistes are being transformed practically, thereby extending the frontiers of creativity.
Or consider the sugar/construction industry today without Aliko Dangote. From little beginnings decades back, Dangote’s investments have grown into an octopus today, with tentacles across the African continent. From being a net importer of cement for decades, Nigeria, through Dangote, has now joined the league of major exporters of the construction staple. Hopefully, in another two years, the nation’s dependence on the importation of petrol/diesel/kerosene to meet domestic consumption would also become history when Dangote Refinery finally comes on stream. This will in turn save the country an average of $5bn spent on fuel importation yearly, thereby conserving our foreign reserve and reducing the choking pressure on the naira.
In the final analysis, what’s to be done? An independent body should be empaneled urgently to take a second look at the claims filed to AMCON as the basis for drawing taxpayers’ money five years ago. This should not take eternity. The true status of the debts claimed has to be established. Not until this is determined can we hope such companies would be able to pay up what they truly owe before thinking of consolidating and returning to profitability.
PREMIUM TIMES
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