Workability and Effectiveness of Assets Management Corporation of Nigeria Act 2010: Intervention in the Nigeria Banking Sector Crisis
Keywords:
Bank Crisis, Rescue Intervention, AMCON Act, NigeriaAbstract
The challenges and prospects of rescue interventions to corporate failures and the Banking Sector Crisis in Nigeria are the focus of this paper. In Nigeria, the impact of the global economic crisis shifted from the capital market to the banking sector where an estimated $10 billion of toxic assets were held by banks whose assets suffered capital erosion due to market collapse. This paper assesses the rescue intervention by the Central Bank of Nigeria through the Assets Management Corporation of Nigeria Act 2010 (AMCON Act) and employs as a method, analytical exposition of the Act in this work. The paper finds that lack of corporate governance and incentive problems caused Nigeria's banking sector crisis. It argues that though the provisions of the AMCON Act are aimed at compelling corporate governance and international best practices, inherent weaknesses and inconsistencies with superior legislations leave a big question mark on its applicability and effectiveness. The paper calls for legislative rethink if Nigeria must prevent future failures in the banking sector and rebuild confidence in the investing public as well as in bank depositors.
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