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Government’s move for Islamic financing reaches advanced stage


The president of the African Development Bank (AfDB) Akinwumi Adesina of Nigeria

The president of the African Development Bank (AfDB) Akinwumi Adesina of Nigeria

*AfDB approves $250m loan for govt’s youth initiative

The Federal Government’s move for sukuk, an Islamic financing model, has reached an advanced stage.The country’s debt manager, Debt Management Office (DMO), is currently shopping for financial and legal advisers and trustee companies to smoothen the process.

Nigeria, which is in a recession and needs to raise funds to plug a budget deficit, has set up a government committee to advise on the amount to be raised from the Islamic bond sale, the timing and jurisdiction of the issue.

As work continues on the process of the planned sovereign sukuk, the size of the possible deal has not been determined.The issuance of a sovereign sukuk was part of a plan by Nigeria’s debt office to develop alternative sources of funding and to establish a benchmark curve.

DMO said it had opened its door for expression of interests from entities, including banks and issuing houses, needed in the process, with deadline for bids submission slated for January 9, 2017.

This came a few days after the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, was elected Chairman of the International Islamic Liquidity Management Corporation (IILM) in Jakarta, Indonesia.

Part of his mandates include the facilitation of effective cross-border liquidity management instruments for institutions that offer Islamic financial services.

To advance the organisation’s goal of enabling a future global finance industry with greater connectivity, stability and sophistication, create and issue short-term Shari’ah-compliant financial instruments to facilitate effective cross-border Islamic liquidity management.

Meanwhile, the African Development Bank Group (AfDB) has approved the $250 million loan for the Federal Government, for the development of a youth-oriented initiative tagged ENABLE Youth Nigeria.

According to the bank, the scheme would contribute to job creation, food security and nutrition, rural income generation and improved livelihoods for youths in both urban and rural areas.

“Most of the loans will be about $50,000 maximum per business. ‘Agripreneurs’ can have individual or joint businesses and the Corporate Affairs Commission must duly register them.

“The specific objective of the programme is to create business opportunities and decent employment for young women and men along priority agricultural value chains of the various enterprises (aquaculture, crops farming, marketing, processing.

“The programme has four components- enabling environment for youth empowerment, which aims to create an enabling environment nation-wide for decent employment of young unemployed graduates (Greenfields) and a proportion of those already engaged in agribusiness (Brownfield);

“Entrepreneurship and agribusiness incubation, will operate in a two-step manner in agribusiness incubation with youth first participating in a two-week agribusiness orientation training (for both Greenfield and Brownfield agripreneurs;

Already, the programme has been billed for implementation in all the 36 states of the Federation and Federal Capital Territory (FCT), within two years and based on readiness.

The first target is unemployed young Nigerian graduates from any field of study who have finished their National Youth Service Corp programme, followed by graduate youths who are already successfully engaged in agribusiness, but have no access to commercial loan to grow their businesses.

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