Projects $4bn capital injection into economy

To stake $98m on capacity building for Almajiris

THE Islamic Development Bank (IDB), yesterday, formally announced its entry into Nigeria with a firm commitment to lead the way in financing capital projects in the country.

The development followed the approval of the board of executive directors of the bank for the establishment of pilot Country Gateway Offices in Nigeria, Egypt, Turkey, Indonesia, and Bangladesh.

The bank, which had been quietly injecting capitals into various projects in Nigeria, announced that till date, it had committed about $470 million (N72.9 billion) in project and trade financing operations in various sectors of the Nigerian economy.

Indeed, total of $4 billion (N620 billion) is expected to be injected into the nation’s economy in the next three years.

At an Islamic Banking-Nigeria Business Forum in Abuja yesterday, the bank and the Federal Government sealed a $98 million (N15 billion) pact to implement the Bilingual Education Programme in Nigeria.

The programme would support government’s policy to integrate and modernise the Almajiri system into formal schools and promote units and understanding, with a positive impact on Millennium Development Goal educational goals, and inclusive and value-based education.

The programme is expected to get the Almajaris out of the streets and give them an equal opportunity to compete for jobs and earn a descent living.

Meanwhile, President Goodluck Jonathan has called on the bank to support government’s infrastructure and general economic development by voting greater funds for Nigeria.

Represented by the Vice-President, Mohammed Namadi Sambo, he said: “Nigeria, being an important member of the bank, is looking forward to such an opportunity to facilitate the re-building of its infrastructure, revamping the manufacturing sector and creating employment for our teeming youths.”

Speaking on how the economy is performing, the President noted: “Our per capita income is expected to rise from $1,222 to $1,450. Inflation has also fallen from 12 per cent at end of 2010 to 10.3 per cent at present.”

President of the IDB Group, Dr. Ahmad Mohamed Ali, used the opportunity provided by the forum to disabuse the minds of Nigeria about the Islamic banking system.

He said: “The Islamic Development Banking Group is not a religious institution. It is a multilateral development finance institution similar to the World Bank, the African Development Bank, the Asian Development Bank and the Inter-American Development Bank.

“Like those institutions, the Islamic Development Bank seeks to promote the socio-economic development of its member countries by providing financing and technical support to critical priority development projects.

The difference from other institutions is that the modes of IDB financing are based on Islamic finance principles which are based on the productive relationship between financial assets and real economic development aspirations.”

He added: “Unlike the other multilateral development banks, the IDB does not deal with interest. Another distinctive feature of the IDB is that the membership of the IDB is composed entirely of developing countries, all in the Southern hemisphere countries which have broadly similar constraints and development challenges. In its lending activities, the IDB promotes solidarity among its member countries.”

He listed some of the many intervention projects the bank was undertaking in Nigeria to include as the National Programme for Food Security, Zungeru dam project, Mambilla hydroelectric dam project, Lagos-Ibadan Expressway project, National Railway Rehabilitation project and the Shagamu-Benin dual carriage project.

Ali stressed that the IDB had been rated Triple-A by the world’s leading rating agencies for almost the past ten consecutive years, before, during and after global financial crisis.

the plan since the 80s.
milk the nation dry till it collapsed, then recycle the money back to develop north.
its an open secret

kunlekunle: the plan since the 80s.
milk the nation dry till it collapsed, then recycle the money back to develop north.
its an open secret

Spot on! Wonder when they'll 'berth' Ayatollah /Sunni Development Bank

Y on earth can't some people just reason for a minute and stop being tribalistic? How is FDI an avenue to milk nigeria? To later develop the north?
Is it not FDIs that took US to where it is today?

We can't progress with this type of mentality, nigerians. If they don't bring FDIs to Nigeria, we will be complaining that we are not progressing. Now they have brought to us, we are singing another song.

"Nigeria and Nigerians" is like "Islam and Muslims". Islam is a good religion, but some bad muslims are spoiling the religion. Also, Nigeria is a good country but some bad nigerians like careytommy and kunlekunle are too tribalistic to allow her progress.

I pity nigerians, not Nigeria.

Islamic Development Bank and financing Nigeria’s economy
Written by Idris Ahmed Wednesday, 14 March 2012 05:00

Nigeria urgently needs a lot of money to develop its infrastructure to grow its economy and create employment for her teeming unemployed youth. The required amount which is estimated at over $100 billion is not readily available in the country and therefore there is the need to borrow.

But then, Nigerians are averse to borrowing because of the country’s previous experience.

In 2006, Nigeria had to pay about $18 billion to exit the Paris debt club and a law was enacted at the National Assembly saying that Nigeria cannot pay more than three percent interest on any loan.

However, over the years after the debt was paid, the country’s debt profile is mounting. Nigeria’s foreign debt is currently $5.6 billion while the domestic debt is in the region of N5.6 trillion.

At the moment, Nigeria is seeking to borrow $7.9 billion from different donors like the World Bank, African Development Bank, Islamic Development Bank among others.

While other potential creditors mentioned above charge some interest on loans, the Islamic Development Bank charges no interest as loans from the bank are project specific and on benefit sharing arrangement.

Even though Nigerians, especially the Christians, are opposed to the establishment of Islamic (non-interest) banking model in the country, Nigeria as a country stands to benefit if it can leverage on the benefit accruing to taking loans from the Islamic Development Bank (IDB).

For instance, in pursuance of the implementation of the transformation agenda of the government of Nigeria and IDB’s Strategic Plan, an indicative 3-year Country Programming Framework (2012-2015) has been formulated.

Under the programme, the bank and its affiliates are to provide financing envelop of $2billion for the implementation of projects in the priority areas of agriculture, energy, transport, water supply and sanitation, education and health.

It will also be used for the development of Institutional Capacity Building to address pockets of poverty and other related initiatives.

Already, a budget of about $700 million for the year 2012 is being considered by the bank for Nigeria.

The IDB was restructured in 2009 and after then embarked on the preparation of Member Country Partnership Strategy (MCPS) in collaboration with the member countries.

The MCPS is a new Business Model of the Bank through which the strategic thrusts of the IDB are aligned with the development priorities of the government. It is to be developed on the basis of extensive consultation process with all key stakeholders including federal and state governments, development partners, private sector, business community and civil societies.

The MCPS exercise for Nigeria is scheduled to be undertaken this year and when completed it would lay out the Bank’s multi-year strategy in assisting the country achieve sustainable socio-economic development by aligning it with medium-term priorities underlined in the Poverty Reduction Strategy of the Transformation Agenda of the Government of Nigeria.

The bank also supports strong partnership in its operations in order to maximize synergy and qualitative and expeditious implementation of projects. The target is to leverage at least twice the financial support of IDB plus counterpart funding by the host country.

Major development partners operating in Nigeria include the UN system, Canadian International Development Agency (CIDA), Department for International Development Bank (AFDB). South-South cooperation is effective in the areas of trade, investment promotion and civil society development.

The bank has so far approved 8 projects to the tune of $200 million and trade financing for $205 million granted to prominent companies and banks in the country.

There is also the $30.2 million for Food Security Program, covering Anambra, Gombe and Yobe states going on.

At the moment, discussion is on for the provision of facilities for the construction of 4 Model Science Secondary schools and 300-bed Specialist Hospital in Kaduna State, Integrated Rural Development Project, Jigawa State and Bilingual Education Program. These are supposed to be provided in at least 12 states.

The bank is also sponsoring study visit of 13 Nigerian irrigation experts from 7 states and Federal Ministries of Agriculture and Water Resources for two weeks to successfully implement/manage small scale irrigation projects in Indonesia in April, 2012 under “Reverse Linkage” program.

The aim of the visit is to enable the delegation observe best practices, provide short term training for trainers and fill the skill gap to train operators and training institutions in the operations and maintenance of small scale irrigation infrastructures in Nigeria.

The ultimate goal of the Technical Assistance (TA) is to help Nigerian small scale farmers improve their agricultural production through adoption of best farming practices that could result in less dependence on rain-fed agriculture, and enhancement of productivity.

In order to foster cooperation with Nigeria and enhance the bank’s country presence to market bank’s brand and improve client’s responsiveness, approval has been given for the establishment of a Group Gateway Office in Nigeria this year. The office is to serve as one-stop-shop for the Group members.

States desirous of IDB financing for projects in the category of Medium Term Priorities are to apply through the IDB Governor for Nigeria, which is the Minister of State for Finance along with detailed feasibility study and the State’s Assembly Resolution authorizing the borrowing.

In case the feasibility is not available, the Bank may consider financing it upon the request of the country. Private sector application for financial support of any of the affiliates may be sent directly to the provided contact addresses, accompanied with a comprehensive project report.

With the window of borrowing opportunities provided by the IDB and the non-interest nature of their loan, Nigeria can take the opportunity to access the bank’s facilities.

The IDB has 56 member countries drawn from Africa, Asia, Europe, Middle East and South America. Twenty seven of the members are Africans. Nigeria is the newest member country. It joined on June 15, 2010.

In appreciation of the contemporary interventionist role of the bank in the economic development of its members, Nigeria’s capital subscription was increased from 0.03 percent to 7.69 percent in June 2010, thus becoming one of the nine permanent members of the Board of Executive Directors.

Authorized Capital of the bank is Islamic Dinnar (ID) 30 billion ($48 billion).

Since inception, in its long standing commitment to meeting the developmental needs of its member countries, especially in sub-Saharan Africa (SSA), IDB has tried to reduce poverty in these countries in accordance with the Islamic tenets of human dignity, brotherhood and solidarity, and human equality.

The bank provides sovereign concessional finance for its least developed members without any form of political conditionality. In addition to its important contribution to the social sectors, the bank has also been active in support to large infrastructure projects like power, telecom and transport to fostering communication linkages and contributing to growth and economic integration in Sub-Saharan Africa.

The bank’s affiliates; the Islamic Corporation for the Development of Private Sector, International Islamic Trade Finance Corporation and Islamic Corporation for the Insurance of Investment and Export Credit extend support for the promotion of private sector driven growth and facilitation of cross-border trade in the member countries.

Nigeria can capitalize on all of these by making its presence more felt in the institution so that it can attract more funds. A Business Forum of the bank is commencing in Abuja tomorrow and this will provide a platform for Nigeria to seek for more financing.

http://dailytrust.com.ng/index.php?option=com_content&view=article&id=156981:islamic-development-bank-and-financing-nigerias-economy&catid=3:business&Itemid=3

^^^you don't need to post that.The haters shall never accept it and its up to them to go sit somewhere and hate.Meanwhile the people who want and cherish the IDB services will embrace it and patronize it.That said.Welcome IDB !!!!! can't wait to start.

^^^^Seconded

Chei, islamic bank dey invest $4billion$. You are welcome. Come right onboard.