AMCON canvasses guarantee scheme for private equity investment


Asset Management Corporation of Nigeria (AMCON) has called on the Federal Government to provide guarantee scheme to encourage investments in the country by private equity firms.

Mustafa Chike-Obi, managing director/CEO, AMCON, who said this on Thursday in Lagos, expressed concern over the low public debt to GDP which is between 10 and 12 percent, stressing that the country can experience growth through massive investment from both within and outside the country.

Chike-Obi, who spoke at the CBO Capital Partners’ 4th annual investors’ conference, said the provision of the guarantee would encourage the private equity firms to come and invest in the economy, noting that the establishment of a federal guarantee agency that would decide how the scheme works would fast track the pace of development.

“The Federal Government of Nigeria must engage massively on a guarantee scheme. I suggest there must be a federal guarantee agency and that when the government decides its priorities, that agency should decide how the guarantee will work”, he said.

Chike-Obi stressed the need for right projects and the right people for private equity in Nigeria to assume its proper role and size.

“I think we need to support private equity to create a more suitable environment for companies to have a guarantee scheme for the debt. It will encourage and make private equity more comfortable in lending,” he added.

The AMCON boss said that the US has public debt to equity of about 60 percent while the guarantees of US to 37 different agencies amount to 90 percent of their GDP. He further said that adding the guarantees and actual debt of the US, their public debt would be about 150 percent and that will develop the country in the area of critical infrastructure.

Other speakers at the event that shared same views with Chike-Obi included Bex Nwawudu, managing partner and cofounder, CBO Partners, who was the chairman of the occasion. Others are Ugo Ikemba, commissioner, Securities and Exchange Commission (SEC); Barbara James, founder, Henshaw Capital Partners; Cordel Robbin-Coker of Carlyle Group; Chudi Ejekam, director, real estate, Actis, and Ehumeme Ohioma, head of investment monitoring, National Pension Commission (PenCom).

Source : BusinessDay

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