Ben Akabueze, Director General of the Nigerian Budget Office, has called for an increase in the statutory contribution of commercial banks to the Asset Management Company of Nigeria, AMCON sinking fund.
Commercial banks in the country are required by law to contribute 0.5 percent of their total assets and 0.5 percent yearly to AMCON.
Akabueze who spoke on Arise Television on Tuesday said the government should increase the levy at this time that banks in the country are making huge profits, apart from their assets that are growing year-on-year.
Aisha Ahmad, Deputy Governor of the Central Bank of Nigeria, Financial Systems Stability Directorate disclosed at the end of the monthly Monetary Policy Committee, MPC meeting in June that total banks’ assets have increased to N65 trillion as of the end of June this year.
Speaking Akaubueze said it will be difficult to recover the N5 trillion AMCON toxic assets based on what banks are currently contributing.
The Asset management company has only managed to recover N1.6 trillion in five years between 2017 and 2021, according to figures obtained by the magazine.
He said, “Yes, this is a matter of serious concern to us on the fiscal side, because if AMCON does not work down these assets and pay down the amount that was invested in securing the assets that burden will eventually devolve on the treasury and become part of the national debt that all of us have to pay.”
“By the design, the resources to work down the obligations would partly come from contributions from the bank and I think that AMCON should at this point consider raising the level of the contributions that the banks make, even on a risk asset-weighted basis, so that banks that contributed significantly to the pool of assets,” of the company.
“Banks that are making mouth-watering profits nowadays should be made to contribute more significantly to working down these assets. It does not look equitable that the banks will dump their toxic assets on AMCON which will now become a public burden and now they are declaring great profits and declaring dividends for their shareholders.”
