Works ministry receives $504m Islamic finance funding to assist with its road projects

NIGERIA'S Federal Ministry of Works and Housing has received Islamic finance funding to the tune of N210bn ($504m) raised by the government to help it fund the execution of critical road projects across the country.

Overwhelmed by an inadequate resource base which has led to the country's annual budget only totalling about $33bn when it has an annual infrastructural deficit of $100bn, Nigeria desperately needs private investment. Sukuk, or Islamic bonds are a huge source of investment in Muslim countries and have been used for numerous infrastructural projects in Saudi Arabia, Kuwait, United Arab Emirates, Malaysia, Indonesia, Turkey, etc.

Despite being a prominent member of the Organisation of Islamic Conference (OIC), Nigeria has seen little in the form of Islamic finance historically. In what may be a turnaround, the federal government has managed to fine N250bn worth of Sukuk funding, of which N210bn went to the ministry of works, the Ministry of Federal Capital Territory received N29bn, while the Ministry of Niger Delta Affairs received N10bn.

Receiving the cheque in Abuja, works minister Babatunde Fashola, explained that past Sukuk financing has allowed the ministry to complete several major roads across the country. He also explained that the impact of debt and borrowing on the economic lives of the people was significant, pointing out that proper usage of the debt on infrastructure in Nigeria had helped  in galvanizing the economy.

Mr Fashola said: “Another thing to take home is that debt properly used can galvanize the economy. It is that debt instrument that serves so many people from diverse parts of Nigeria here today.

“Wealth is distributed across when committed to infrastructure. Money moving around the economy creates consistent employment and engagement, as for instance suppliers are at work."