Operators in the financial market have condemned the move by members of the House of Representatives to amend some sections of the Asset Management Corporation of Nigeria (AMCON) Act.
The operators in separate telephone interviews with THISDAY at the weekend argued that such action could affect the gains recorded in the banking sector, even as they said that it might dampen confidence, especially in foreign investors and correspondent banks, which was built by the reform process.
THISDAY gathered that the Clerk, House Committee on Banking and Currency, Mr. Yilji Yakubu, had in a letter, directed the management of AMCON to an investigative hearing at the National Assembly Complex, today.
Part of the letter also requested that the corporation should produce a memorandum on any area or section of its Act that need to be amended to further "to bring in conformity with the provision of the constitution of the federal republic of Nigeria as amended.”
But considering the issues surrounding the activities of some committees of the House of Representatives, the Registrar/Chief Executive Officer, Institute of Chartered Economists of Nigeria (ICEN), Mr Peter Ikpamejo, advised the lawmakers not take any hasty decision on the AMCON Act.
He said: “I think what the House should do is to engage professionals to properly look at the AMCON Act and advise them on what should be done. The AMCON Act should not just be a political issue.”
On his part, an analyst at Profund Securities Limited, Mr. Chijioke Obiagwu, advised the lawmakers not to destroy the gains that had been recorded in the banking industry, as a result of the corporation’s intervention.
Obiagwu added: “This should not be coming up at a time when there are strong indications that the banking crisis is over and when we are expecting that the gains of banking reform will have a positive effect on the stock market. We all saw the positive earnings announced by banks in first quarter 2012 and all these were as a result of AMCON’s intervention. Today, non-performing loan (NPL) in the industry is below five per cent.
“So, it will not be proper for the House of Representatives to start talking about tampering with the AMCON Act. Today, the environment is better and foreign investors have noticed that our banks are now well capitalised and very liquid.”
Similarly, the Managing Director of a leading Financial Advisory firm, who pleaded to remain anonymous, said that the move would be affect confidence in the system.
“I keep wondering what the whole idea is about. You know AMCON was established to clean up banks’ NPLs and it has lived up to that. So what amendment(s) are they talking about? I think the Act should be left the way it is, especially now that the corporation is talking about debt recovery,” he added.
The House had in November 2011, deliberated on the motion titled: Expenditure of Public funds by the Central Bank of Nigeria (CBN) and AMCON and had adopted a resolution mandating the committee to conduct an investigating hearing on the sources of funds, expenditures and intervention of the apex bank and the corporation in the various areas and determine whether or not they conform to the constitution of the federal republic of Nigeria.