The Genesis:

The Nigerian banking sector ran into financial crisis in Years 2008 and 2009 which was caused by both the global financial crisis of Years 2007 - 2009 and local factors including the crash of the stock market.

The Asset Management Corporation of Nigeria ("AMCON") was established in Year 2010 by virtue of the Asset Management Corporation of Nigeria (AMCON) Act, 2010 (the "Act")1 with a view to ensuring stability in the banking and finance sector. The Act empowered AMCON to purchase toxic assets or non-performing loans ("NPLs") from Nigerian banks so that these banks could improve their balance sheet and liquidity, with a view to avoiding the risk of failure which would have adverse effects on the Nigerian economy. Thus, AMCON was that timeous measure which saved the financial sector, the Nigerian economy, as well as citizens and their businesses from the full impact of the global financial crisis.

The objects of AMCON are as follows:

"a) Assist eligible financial institutions to efficiently dispose eligible bank assets in accordance with the provisions of the AMCON Act;

b) Efficiently manage and dispose of eligible bank assets acquired by the Corporation in accordance with the provisions of this Act;

c) Obtain the best achievable financial returns on eligible bank assets and other assets acquired by it..."2

AMCON operates by acquiring the NPLs and security assets from banks (usually at a discount), then steps into their shoes as creditors and proceeds to recover these NPLs from the debtors.

In order to enhance the performance of AMCON, the Act granted AMCON special powers viz: a protected receivership regime which enables it to appoint its own receiver for a debtor company3; power to apply ex-parte for possession of a debtor's property while filing a debt recovery action within 14 (fourteen) days of the grant of such order4; power to apply ex-parte for attachment and freezing of a debtor's funds while filing a debt recovery action within 14 (fourteen) days of the grant of such order5; special powers in bankruptcy proceedings where a debtor can be adjudged bankrupt by virtue of a receiving order made pursuant to the Act6; simpler set of winding up rules7; and special debt recovery procedure where the Chief Judge of the Federal High Court was obligated to designate Judges for the swift hearing and determination of AMCON debt recovery matters8.

Efficacy in Troubled Assets Resolution:

Despite the additional powers granted to AMCON through the enactment of the AMCON (Amendment No. 1) Act, 2015, and after nearly ten years of operation, AMCON still owed the Central Bank of Nigeria (CBN) about N4,500,000,000,000 (Four Trillion, Five Hundred Billion Naira) as at Year 2019.9 AMCON has about N1.7 Trillion worth of assets currently under litigation across the country and this could rise even further, as more NPLs are acquired and become the subject of litigation. It is therefore safe to conclude that the performance of AMCON had been suboptimal and its tools were in dire need of sharpening, if the value of these assets which are currently tied up in court, are to be unlocked and recovered.

Consequently, on the 29th of July 2019, the AMCON (Amendment No. 2) Act, 2019 was enacted to fortify and further enhance the powers of AMCON. Amendment No. 2 comprises 24 (twenty-four) sections which amended existing sections of the Act as well as introduced new provisions.

Amendment No. 2 is anchored on eight main features which include: tracing and tracking of debtors' hidden funds; holding Eligible Financial Institutions (EFIs) to their loan sale obligations; checkmating debtors' legal gymnastics and their manipulative use of legal technicalities to frustrate the recovery of assets; fast tracking the hearing and determination of AMCON cases; enhancing AMCON's rights over collateral which secure Eligible Bank Assets (EBAs); refining AMCON's already existing special powers; naming & shaming of recalcitrant debtors and making one of the conditions for contracting with the Nigerian Government subject to good standing with AMCON; and prescribing a sunset date (i.e. the dissolution and winding up of AMCON).

To trace and track debtors' hidden funds, Amendment No. 210 targets debtors who are able but unwilling to pay their debt. These debtors instead, choose to hide their funds and financial details away from AMCON to frustrate recovery of the loans. The amendment, thus, makes an exception to the principles of banker-customer confidentiality and grants AMCON the power to access this confidential information, including Bank Verification Number (BVN), access to debtors' computers, details of debtors' bank balances and investments, by a written notice to the EFI.

These seem highly invasive, and one might question the constitutionality of these amended provisions, especially in the light of the provision of Section 37 of the 1999 Constitution of Nigeria as amended, which guarantees the right to privacy11. However, it must be explained that Section 37 of the Nigerian Constitution guarantees "the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications..."; and Chapter 3 of the same Constitution defines citizens by reference to natural persons. Most of AMCON's primary obligors are corporations and not natural persons. To the extent that a debtor is not a natural person, then the provision is not unconstitutional. Therefore, AMCON would not be seen as breaching the provisions of the Constitution as relates to artificial persons. The case of natural persons is different as the provision seems unconstitutional, an infringement of the right to privacy. AMCON has always had more than enough tools available to it to recover the debts owed it. However, a combination of political influence, legal maneuvering, and poor collateral has hampered AMCON in this regard. The other amendments should largely curb these challenges except for maybe political influence.

Again, it may be argued that the amended provisions offend the provisions of the Nigeria Data Protection Regulation (NDPR) 201912, but the correct position is that provisions of an Act of the National Assembly (in this case, Amendment No. 2) always take precedence over a Regulation (in this case, the NDPR 2019), by virtue of the doctrine of the hierarchy of legislation.13 Indeed, this amendment enhances the capacity to trace and track hitherto hidden funds of debtors and banks are no longer able to hide under the principle of banker-customer confidentiality. The heavy fine of N10,000,000 (Ten Million Naira) prescribed by the amendment provides some deterrent to EFIs who may consider refusing to cooperate with AMCON by providing the requested information.

Holding EFIs to their loan sale obligations14 is a very vital amendment to the AMCON Act, and it goes a step further by giving AMCON the right to claw back,15 which in simple terms, is AMCON's entitlement to take back the money it paid for an Eligible Bank Asset (EBA) from any EFI, if AMCON discovers, at the time of attempts to recover the loans or assets, that the EFI did not give full disclosure of the circumstances of the NPL as stipulated by the claw back provision. Thus, clear claw back provisions in the Loan Purchase Agreements typically entered into between AMCON and EFIs shall now entitle the former to claw back the full purchase price of EBAs (which lack proper documentation necessary for fishing out the debtor or obligor in order to recover the said asset) together with interest "at a rate equivalent to the average of the federal government treasury bills interest rate, from the date of the acquisition of the EBA to the date the full purchase price is repaid". The Amendment No. 2 also provides various penalties for EFIs (including their Directors, Managers or Officers) which fail to furnish adequate information, documents, books of account, etc. to AMCON or indeed furnish misleading information. It is also worthy of note that AMCON's right to demand for proper documentation concerning acquired EBAs is retrospective.16 Although Section 4(9) of the 1999 Constitution of Nigeria (as amended) states that "...the National Assembly or a House of Assembly shall not, in relation to any criminal offence whatsoever, have power to make any law which shall have retrospective effect", it is reasonable to conclude that the retrospective right of AMCON to demand for proper documentation concerning purchased EBAs is not a criminal provision in itself, and thus, is permitted to be retrospective in nature under Nigerian law. What may not be permissible, however, is an attempt to make retrospective, the penalty for failure of an EFI to furnish the requested documentation or an EFI's deliberate furnishing of misleading information pertaining to an EBA, amongst others.

Amendment No. 2 also checkmates debtors' numerous antics and their exploitation of legal technicalities. "Major challenges facing the recovery process relate to the antics of local lawyers to frustrate the smooth and speedy determination of cases by introducing technicalities that slow down the judicial process"17. A lot of times, debtors, resort to challenging AMCON's acquisition of their debt, applying for an injunction, stay of execution, injunction pending appeal, defence of statute bar, etc., all in a bid to stall an enforcement or recovery action.

Thankfully, with the new amendments, AMCON (together with its Officers and Directors) now have immunity against legal proceedings instituted by reason only of the acquisition of an EBA.18 Amendment No. 2 also imposes conditions for the grant of stay of proceedings, stay of execution and injunction pending appeal,19 while no statute of limitation shall apply or operate to bar AMCON or invalidate any claim brought by it in respect of the recovery of a debt or the enforcement of any security or obligation of a Guarantor or Surety in connection with an EBA.20 It is a good thing that debts owed to AMCON are now recoverable without time limit. This effectively eliminates the issue of statute bar. However, in practical terms the mischief which the provision seeks to cure may not always prove efficacious. Where for example, an action is instituted several years after a bad debt has been purchased by AMCON, vital witnesses may have died, or the memory of some may not be as accurate or vivid. Vital documents also stand the risk of being lost or damaged after several years. Again, the disapplication of the principle of limitation of action in our opinion, creates a rather misleading impression that there is all the time in the world to recover these bad debts and enforce securities or other obligations pertaining to an EBA.

As stated above, AMCON has trillions of Naira worth of assets that need to be recovered. AMCON also, is not a corporation designed to exist for all time. Necessity resulted in its establishment, and it shall only be seen to have fulfilled its mission when it recovers a high percentage of its current EBA portfolio. It is therefore only expected that one of the amendments introduced should focus on the fast-track hearing and determination of AMCON Cases. The new Section 53(1) - (6) of the Act compulsorily requires the heads of the respective Courts to designate "one or more courts exclusively for hearing and determining" AMCON-related matters. Where this is done, the designated AMCON Judges shall over time, improve their knowledge and specialization in the area of debt recovery and with the knowledge at their fingertips, would be more willing to deliver bench rulings, instead of having to adjourn in order to conduct further research, prior to delivering a ruling.

Again, Amendment No. 2 sets time limits for the hearing and determination of cases within 6 (six) months for matters at the trial court21 and 60 (sixty) days for the hearing and determination of appeals both at the Court of Appeal and the Supreme Court.22 This effectively elevates the status of AMCON cases to that of election petition matters and their importance to that of fundamental human rights cases, because priority and premium are placed on matters pertaining to same. This amendment thus, expedites the hearing of AMCON cases and gives little or no room for delay tactics to be employed by debtors. The provisions are, however, silent on the implications for failure of the above Courts to hear and determine cases (either at the trial or appeal stages) within the stipulated time frame. It is our recommendation that the Special Practice Directions, either issued or to be issued by the respective Heads of Court to the specially designated courts, should cater to this omission, to enhance compliance with the stipulated time frame.

Amendment No. 2 also enhances AMCON's rights over the collateral which secures EBAs.23 Here, the security interests of AMCON are converted to ownership interests, such that AMCON takes over these assets not as a security holder (or one out of numerous interest holders), but as owner.24 AMCON shall, however, be accountable to other secured creditors to the extent of their priority ranking to the security interest.25 This amendment addressed the challenges experienced by AMCON in exercising the power of sale as a result of the nature of the security interest it acquired, upon the acquisition of an EBA. This is a welcome amendment as it removes one of the major hurdles faced by AMCON in its attempts to expedite the realisation and resolution of EBAs - the power to sell the assets. It also operates retrospectively, applying to all EBAs including those acquired by the Corporation before May 2015.26 This as we have seen, is constitutional.

AMCON already possesses special powers (e.g. the power to act as or appoint a Receiver), which with the 2019 amendments, are further refined by the substitution of old provisions with new ones.27 The affected provisions deal with AMCON's power to act as or appoint a receiver; powers relating to the custody and possession of a debtor's property (orders of custody and possession are applied for ex-parte, but are interlocutory in nature, subsisting till judgment or a final determination of the action by a court)28; and the application for interlocutory freezing orders.

AMCON is now also granted special powers in bankruptcy proceedings. These specialized proceedings can now be triggered where a debtor fails "to comply in full, within 90 days, with a written demand notice issued by the Corporation requiring the debtor to pay a liquidated sum ... ...owed by the debtor to the Corporation...". The said bankruptcy proceedings can be commenced by way of an originating motion and a receiving order of court can be made against the debtor. Such receiving order is deemed to have been and shall have full effect and force as a receiving order made under the Bankruptcy Act29. New provisions also grant AMCON special powers in winding-up proceedings. Winding-up proceedings now only require as a trigger, the failure of a body corporate - debtor to comply in full, within 30 days, with a written demand notice issued by AMCON requiring the said body corporate - debtor to pay a liquidated sum to the Corporation, owed by the debtor to the Corporation. The said winding-up proceedings can be commenced by way of an originating motion, and a winding-up order can be made against the said body corporate – debtor.30 AMCON also now has the power to appoint legal practitioners to specifically prosecute offences under the AMCON Act, subject to the overriding powers of the Attorney-General of the Federation31.

These additional and special powers serve to improve the efficiency of AMCON in the resolution of troubled assets, as they are now more readily exercisable. However, one might wonder about the seeming extremity of these provisions and how they comply with the constitutional provision which guarantees the right to fair hearing. For example, in the exparte hearing of an application for an order to impound assets, the order made if granted, shall be interlocutory in nature, valid till the hearing and determination of the case. It should also be noted that no fundamental human right is absolute, and the law provides for instances when such rights can be denied. The question is whether the provision seizing assets ex parte but in the nature of interlocutory order is reasonably justifiable under the prevailing circumstances of atrocious indebtedness and resultant strain on taxpayers? It is doubtful but certainly up for debate. What is clear is that AMCON's powers are incredibly special in nature and can be seen as a radical step taken to ensure that as much leverage as is possible, is given to enable AMCON to succeed in its mandate.

Naming and shaming provisions32 empower AMCON to publish the list of debtors who have failed to meet their debt or other repayment obligation(s) in connection with any EBA acquired by AMCON, in national daily newspapers; and to furnish this list of recalcitrant debtors to the federal government and its ministries, departments and agencies. The amendment then obligates the federal government and its ministries, departments, and agencies to seek clearance from AMCON prior to contracting with or making payments to these debtors. The definition of a "debtor" or "debtor company" shall for the purpose of the relevant sections, include: the borrower; all guarantors or sureties of the borrower; all directors and shareholders of the borrower; all directors and shareholders of any corporate entity guarantor or surety of the borrower; and all companies and entities, 50% (fifty percent) or more of whose share capital is owned or controlled jointly or otherwise by one or more of the aforementioned categories.33 Although the scope of its applicability is worrisome as it will certainly affect innocent persons, the purport is welcome. The National Assembly may consider limiting the scope as it is not necessary for all shareholders to be roped in. It is only right that the same government that the debtors refuse to pay, or are unable to pay, should not be rewarding them with contracts. Where contracts already exist, the government should pay itself first from the contract. Henceforth, debtors have an extremely limited hiding space. AMCON should therefore be fearless and seize the opportunity which the Amendment No. 2 provides, to recover as many EBAs in its portfolio as possible, by making use of this naming and shaming option.

Impending Sunset:

All things, either good or bad, must come to an end in due season. The fate of AMCON is no exception. Amendment No. 2 refers to a "dissolution date" which mollifies the anxiety and moral hazard pertaining to a perpetual existence of AMCON.

The new Section 47(1) of the Act states as follows: "At dissolution date, the Corporation shall stand dissolved and the Corporation's Board of Directors shall appoint, upon such terms as it deems fit, one or more liquidators to wind up the affairs of the Corporation, realise all assets of the Corporation to be dealt with and distributed in accordance with ... this Act." No dissolution date or wind-down date for the Corporation is specified. This omission also occurred in the AMCON Act 2010. Therefore, it remains unclear, at this point, when AMCON shall be liquidated, although numerous speculations and informed predictions have been flying around.

It is my view that the Federal Government should allow a reasonable time for the effect of Amendment No. 2 to be ascertained and then gauge and fix a reasonable date for the dissolution of AMCON.

In the meantime, it is my hope that before the sun sets and the curtains close, AMCON would have kept the faith and fought a good fight, choosing to soar on the platform of the numerous favourable amendments highlighted above, to record a high success rate in the disposal of eligible bank assets, for the overall benefit of the Nigerian economy.


  1. Asset Management Corporation of Nigeria Act, No. 4, 2010.
  2. Section 4 of the Act.
  3. Section 48(1) of the Act; Section 48(3) – (8) of the Act (as amended by the Amendment Act 2015).
  4. Section 49 of the Act.
  5. Section 50 of the Act.
  6. Section 51 of the Act.
  7. Section 52 of the Act.
  8. Section 53 of the Act
  9. "AMCON says only 350 Nigerians owing N3trn" (last accessed on 17th August 2020). See also "N5trn AMCON Debt: FG sets up committee to recover debt " (last accessed on 24th March 2021).
  10. Section 2(a) of the Amendment No. 2 inserts a new paragraph (ua)(i) - (iii) in Section 6(1) of the AMCON Act 2010. Section 17 of the Amendment No. 2 inserts a new Section 50A to the AMCON Act 2010. Section 50A (2) imposes a N10,000,000 (Ten Million Naira) fine for any EFI which fails to comply with the request for information by a written notice issued to it by AMCON and a further N50,000 (Fifty Thousand Naira) for each day that the failure to comply continues.
  11. Section 37 of the 1999 Constitution of the Federal Republic of Nigeria (as amended).
  12. Nigeria Data Protection Regulation 2019 issued by the National Information Technology Development Agency.
  13. Orji v. Anyaso (2000) 2 NWLR (Pt 643) p. 1; Orhiunu v. F. R. N (2005) 1 NWLR (Pt. 906) pp. 55-56, paras. H – D.
  14. Section 31(2) - (8) of the Act (as amended).
  15. Section 31(7)(d) of the Act (as amended).
  16. Section 31(3) of the Act (as amended).
  17. "AMCON, AMPs and Debt Recovery Turnaround - First Glance" (last accessed on 24th March 2021) See also "Debt Recovery in Nigeria - Case Study of 4 Debtors" (last accessed on 25th March 2021).
  18. Section 33(A) of the Act (as amended).
  19. Section 53(7) of the Act (as amended). The condition on which such applications (for stay of execution, stay of proceedings, injunction pending appeal, etc.) shall be granted is that the Applicant shall deposit the sum claimed by AMCON into "an interest yielding account in the name of the registry of the relevant court".
  20. Section 35(5) of the Act (as amended).
  21. Section 53(3) of the Act (as amended).
  22. Section 53(5) and (6) of the Act (as amended).
  23. Section 34 of the Act (as amended) and new Paragraph (c) added to Section 39 of the Act (as amended).
  24. New Section 34(1)(a) of the Act (as amended). By this amended provision, subject to the Land Use Act and Section 36 of the Act, AMCON becomes vested with and acquires legal title to the eligible bank assets (tangible or intangible) "to the exclusion of all other creditors; and is vested with the power to take possession of, manage, foreclose, sell, transfer, assign or otherwise dispose of the acquired eligible bank asset... in full or partial satisfaction of the debt owed to the Corporation...notwithstanding that the security interest in such asset or property is equitable only".
  25. Section 34(1)(c)(i) and New Section 34(1)(d) of the Act (as amended).
  26. Section 34(3) of the Act (as amended).
  27. The Amendment No. 2 substituted Sections 48 - 52 and 55 of the Act with new Sections 48 - 52 and 55(1) and (2).
  28. Sections 49 and 50 of the Act (as amended). Section 49 focuses on a debtor or debtor company's moveable or immovable property, while Section 50 focuses on a debtor or debtor company's funds in any account with any eligible financial institution.
  29. Section 51(1) and (2) of the Act (as amended).
  30. Section 52 of the Act (as amended).
  31. Section 55(2) of the Act (as amended).
  32. Section 6(6) of the Act (as amended).
  33. Section 50B (4) of the Act (as amended).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.