Nigeria’s attempt to establish an active distressed debt market for the first time is promising, but lawyers have raised concerns over buyside protections.
Commercial banks in Nigeria have seen a rise in non-performing loans (NPLs) due to inflation, negative GDP growth and depreciation of the naira. According to the central bank (CBN), NPLs grew from N1.678 billion ($4.6 million) in June 2016 to N2.08 trillion in December.
Nigeria does not have a deep asset management market at the moment. The Asset Management Corporation of Nigeria (Amcon), which is owned by the federal government, is the only firm that can acquire, manage and dispose of banks’ assets.
To tackle this issue, the CBN recently released a set of guidelines inviting promoters and investors to register as private asset management companies and to comply with...