Movement on AMCON

The president's nominees for executives and directorial positions at the Asset Management Company of Nigeria (AMCON) are being submitted to the federal legislature.

Won't comment on the candidates since I do not know much about them so far. Given the nature and quality of reportage by our own media and by the global media, odds are we are not going to learn anything about the nominees that will give us any indication of how suitable they are for the job, particularly in a country with problematic, unethical and sometimes criminal connections between the political elite and the business elite. I have supported the creation of AMCON based on my hope that it rescues the Nigerian banking industry from its self-created toxic assets problem ... so I hope AMCON doesn't turn into a means for politicians to rescue themselves (most politicians are also "businessmen"), their business associates, and their supporters donors in the private sector ... at the expense of the public (who are going to have to foot the bill for the eventually multi-billion dollar loss AMCON will take on the distressed and "toxic" assets it will "buy" off the banks' books).

There has to be a thorough cleansing of banking, equity and finance in the federal republic. Not just new laws and regulations, but real enforcement of old and new regulations.

It looks like Ndi Okereke-Onyiuke will have serious questions to answer once the dust settles, but the crash in banking stocks and concommitant (not to mention precipitous) 33% fall in the capitalization of the Nigerian Stock Exchange a couple of years ago is bigger than one scapegoat. Adding those banking executives stripped of their jobs by Sanusi and/or prosecuted (like Erastus Akingbola) doesn't even begin to scratch the surface of the rot.

And this is my fear.

Nigerian politicians, all of them, are entirely averse to true reform. They have a knee-jerk reaction against cleaning up any sector of the economy, polity or society. They benefit from the loopholes in the system, and are able to empower (politically) and enrich (economically) themselves in large part because of our systemic and institutional deficiencies.

I just don't see them doing what needs to be done to fix our banks. If anything, federal, state and local governments need the banks to continue to be pliable funders of the ever-growing budget deficits at all three tiers of government, never mind that this symbiotic relationship crowds out capital for entrepreneurs and young people who could otherwise employ themselves rather than see the continued spectacle of a million young applicants fighting for each announced formal sector job opening.

I have supported strong action by Nigeria to tackle the toxic asset problem, and as such I remain a supporter of the AMCON concept. Whatever AMCON turns out to be in reality may or may not be the same as the concept we have been promised.

We wait to see.