The Asset Management Corporation of Nigeria (AMCON) was established as a stabilizing force in the aftermath of a banking crisis, designed to purchase toxic assets and restore confidence to the financial system. Its mandate was clear: recover bad debts, clean up bank balance sheets, and pave the way for a healthier credit environment. Over time, however, the corporation’s operations have expanded in ways that raise questions about whether the “bad bank” model is still functioning as originally intended.

When viewed against models adopted in other jurisdictions, Nigeria’s experience stands out. While the “bad bank” approach has seen relative success in countries with stronger enforcement mechanisms and more efficient legal systems, the Nigerian context has exposed structural weaknesses that undermine the model’s effectiveness.
The more AMCON pushes to fulfil its mandate through takeovers, asset seizures, and aggressive enforcement, the clearer it becomes that the underlying problems run deeper than bad loans alone.

This article explores how AMCON’s recovery strategy has evolved, why the bad bank model is faltering in the Nigerian context, and what the corporation’s expanding role means for the future of the financial system.

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