Islamic bank to invest in Nigeria

[Richard Akindele]

There are strong indications that Islamic Development Bank is interested in investing in Nigeria and now the bank is presently discussing with the federal government on how it could assist to finance some of the country’s projects.

Islamic Development Bank (IDB), under the leadership of Dr Ahmed Mohamed Ali, president of the bank, has capital base of 15 billion Islamic Dinar while it utilizes various Shariah-compliant modes of financing to support development projects in its member countries.

Through these modes, the IDB finances a variety of projects in the agricultural, industrial, agro-industrial and infrastructural sectors. The bank also finances small and medium-scale enterprises (SMEs), micro-finance schemes .

Disclosing this to Vanguard in an interview, the former vice-president of African Development Bank (ADB), Ogunjobi, who is now the liaison officer, said IDB is presently examining some of the nation’s projects and how best it could come in to render financial support to ensure that those projects are executed in no time, adding that IDB is considering supporting Nigeria with $30million for a start

However, for operational purposes, the bank has classified its member countries into two groups, with the view to tailor its financing more “equitably�. The first group defines countries by their stage of development, essentially comprising the least developed member countries (LDMCs) and the Non-LDMCs.

The bank’s classification, Vanguard learnt, is used to allocate the concessional resources in the bank’s “annual operations plans�.

The primary benefactors of concessional financing are the LDMCs which is usually 80 % of the total annual allocation, while the non LDMCs benefit mostly from ordinary financing. There are 25 member countries classified by the bank as LDMCs.

Though, the present membership of the bank consists of 56 countries but the basic condition for membership is that the prospective member country should be a member of the organization of the Islamic conference, pay its contribution to the capital of the bank and be willing to accept such terms and conditions as may be decided upon by the IDB board of governors.

The bank’s principal office is in Jeddah in the Kingdom of Saudi Arabia,.

IDB’s functions also includes equity participation and grant of loans for productive projects and enterprises besides providing financial assistance to member countries in other forms for economic and social development.

The bank is also required to establish and operate special funds for specific purposes including a fund for assistance to Muslim communities in non-member countries, in addition to setting up trust funds.

Vanguard

Admin's commentary:

It worries me deeply that this financing has something to do with Shariah. Shariah often translates into laws unfriendly to people who do not subscribe to the believes of the Islamic faith. What conditions would be attached to this Islamic bank investment?

My advice to states considering being a part of this scheme is that they tread very carefully. I guess it'd be fine in states that have already adopted Shariah law. This would just be one more addition to the process of Islamizing such states.

Nigeria should be mindful of allowing religion to take root in the country. That includes both Islam, Christianity, and any other religion. The ideal kind of government keeps religion separate from government affairs. Nobody says don't worship your God, but do it on your own time.

Just my 2 cents.