President Goodluck Jonathan has asked former Goldman Sachs investment banker Mustafa Chike-Obi to run the state-owned “bad bank” to absorb the non-performing loans of nine institutions rescued in a N600 billion bailout a year ago.
The President submitted the nomination of Chike-Obi, the son of a celebrated Nigerian mathematician, to the National Assembly for approval earlier today.
The Asset Management Company of Nigeria (AMCON), as the institution is known, was passed into law in July although uncertainy about how it will value non-performing loans has delayed the sale of rescued banks to new investors.
The appointment of directors marks another step down the long road to resolution of the debt hangover, which continues to hamper the development of Africa’s third-biggest economy.
Other appointments are Aliyu Kola Belgore as AMCON chairman and Hewet Adegboyega Benson, Dosunmu Mofoluke Benedicta and Abbas Muhammad Jega as executive directors.
Belgore is a prominent figure in Nigerian financial circles with experience dealing with troubled banks.
Commercial banks have tightened lending in Nigeria since the bailout of the nine lenders, who were classified as dangerously undercapitalised. The aim of AMCON is to free up bank balances to allow them to lend again.
Several foreign and local banks as well as private equity firms are interested in recapitalising the rescued banks but are unlikely to do so until the bad loans are off their books.
*Mustafa Chike Obi, before his appointment was the Managing Director of a close knitted 10-man business – Madison Park Advisers LLC – an Investment advisory firm specializing in Investment consulting, brokering of fixed-income securities and some venture capital activities. The company is located in the Greater New York City Area – http://www.mparkgroup.com
A first class graduate in Mathematics at the University of Lagos; Mustafa undertook further education at Stanford University and Stanford University Graduate School of Business.