Nigeria: Recession - Govt Sees Islamic Finance Option to Raise Investment

24 November 2020

The Federal Government has said that it sees the Islamic economic option as an avenue that will encourage domestic investments and rapid economic development in the country.

The Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, said this on Tuesday in Abuja at the formal launch of 2020/21 State of the Global Islamic Economy (SGIE) Report (Nigeria), organised by the Dar Al Halal Nigeria Limited.

According to her, the nation has benefitted immensely by being a member of the Islamic Development Bank (IDB), including being able to assess financing and, in some cases, grants for some of the nation's major capital projects.

"We will continue to find and look for options to broaden our economy in a manner that would enable us grow on a sustainable bases that is inclusive and would not leave anyone behind. We have taken numbers of steps and one of the steps is our membership of Islamic Development Bank (IDB).

"We see Islamic economic as an option that we have vigorously pursue to encourage domestic investments in Nigeria and also encourage Islamic countries that would be looking for investment opportunity in a large economic like Nigeria with large deficit infrastructure and deficit in development," Mrs. Ahmed said.

She said that Nigeria is the fourth largest investors in the IDB and it was able to assess financing and, in some cases, grants for some major capital projects.

She said, "This membership of IDB also give us the opportunity to interact with the organization of Islamic communities and there is a lot of advantages in doing that. We have exploit IDB and today we have Jaiz Bank and now Taj Bank and as well as Fidelity Bank which has Islamic Banking facilities and other banks are considering that option too.

"This is important because over time Islamic communities have been excluded from financing opportunity because the Islamic communities does not want to interest vary elements. But now there are options that are available. There is also another option for insurance and it is Islamic compliance."

The minister said that recently, the Federal Government has been issuing Sukuk funds, having issued the third round of Sukuk funds in 2020 and they have become extremely popular.

Speaking earlier, the Director Dar Al Halal Nigeria Limited, Nasir Muazu Adamu, said the organisation was set up to promote Halal Trade in Nigeria and between the Organization for Islamic Cooperation (OIC) member countries.

According to him, "the initiative is to identify business opportunities for our clients by leveraging on our relationship between the public and private sectors of the Nigerian economy.

"Our mission is to build a platform for Nigerian businesses to participate actively in the growth and development of the two trillion dollar-plus global halal industry. This, we hope to achieve through our partnership with DinarStandard Dubai, United Arab Emirates (UAE).

"The collaboration between Dar Al Halal Nigeria and DinarStandard Dubai, UAE, is expected to provide halal advisory services that are tailor-made and client specific in the areas of Halal pharmaceuticals, agriculture and agro allied businesses, Halal fashion, Halal finance, Halal travels and lifestyle and Investments," Adamu said.

Nigeria ranks 13 in global Islamic Economy

Presenting the report virtually from Dubai, UEA, the Managing Director, DinarStandard, Raffiudin Shikoh, said that the SGIE report is an annual study conducted by Dinar Standard, a strategy research and advisory company registered in the USA with its branch office in Dubai and in partnership with host cities across the OIC countries.

While listing the top 15 most ranked countries, Shikoh said that Nigeria ranked 13 ahead of Sri Lanka and Singapore and below Malaysia, Saudi Arabia, UAE and Indonesia, who ranked from first to fourth positions respectively.

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