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Economic expert tasks FG to seek cheaper way to finance budget

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[FILE PHOTO] Economy financials

Nigeria’s consistent reliance on interest based loans; especially from the international market is one of the major reasons for the poor state of the country’s economy.

The Director of International Institute of Islamic Banking and Finance, Bayero University, Kano State, Professor Binta Tijjani Jibril who made the assertion recently, therefore, urged the Federal government to seek more “cheaper and effective” ways of sourcing for funds to finance its budget instead of relying heavily on interest-based, foreign and domestic loans.

Jubril, a professor of economics spoke at the closing ceremony of a three-day thematic training on “Financing Start-ups and SMEs using Islamic Products, held at the Tai Solarin University of Education, Ijebu-Ode, Ogun State.

The programme was organised by Al-Hayat Relief Foundation to train over 150 entrepreneurs from Kwara State and other Southwest States of Ogun, Oyo, Ondo, Osun and Lagos on ways they can benefit from Islamic financing to develop their businesses.

Jubril who was one of the facilitators at the programme said it was regrettable that despite the debt waiver by the Paris club few years back, Nigeria is still wallowing in huge debt, a situation she described as unfortunate.

She suggested raising of bonds and “sukuk”, among others as cheaper and effective sources of funds to finance the budget.

A sukuk is an Islamic financial certificate, similar to a bond in Western finance that complies with Islamic religious law commonly known as Sharia.

According to her, sukuk is not only a cheaper alternative to foreign loans but also a transparent way of financing infrastructural projects.

Her words, “I am very worried about the debt of the country, I am not only a student of Islamic banking and finance, but also I am a student of economics. If you see the cost of debt on our neck up till now, despite the Paris club debt waiver and everything, you will be shocked and this is because Nigeria had consistently relied on interest based loans from international market.”

“What we are saying is that there are cheaper ways to access funds, cheaper, better and more effective. Just consider the Sukuk for example, federal government want to raise N100billion, they issued Sukuk of 100billion within one week, people have paid up and the government is building roads, or Hospitals or Schools and I am benefiting, everyone is benefiting in the project.”

“With Islamic option, everything has to be transparent, if you issue Sukuk today and you say you are going to use it to build so and so hospital, you must use it for the project, and you cannot divert the funds. Look at how this particular product can help to solve our corruption problem and it is participatory because if you look at it, everyone will participate in the raising of the funds.”

“The federal government should improve its participation on Islamic banking and it should give it more awareness so that the people can know that the benefit is for everyone. We should not allow sentiment to prevent us from enjoying the full benefit of Islamic financing, if every other international countries are enjoying it”, Jubril said.

The university don disclosed that the institute is specialised in training entrepreneurs, cooperative societies and individuals on how they can leverage on the available options under Islamic financing for the development of their businesses and the country’s economy at large.

Jubril who lamented that many commercial banks in the country do not have suitable loan facilities for small and medium scale enterprises because they (commercial banks) consider them as high risk, urged business owners, irrespective of their religion to try Islamic banking because they charge no interest on their loans.

The convener of the programme who also doubles at the National President of Al-Hayat Relief Foundation, Dr. Olatubosun Azeez in his address urged the participants to make good use of the knowledge they gained from the training to develop not only their businesses but the economy of the nation.


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