Islamic Finance | |
Islamic Finance | |
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Friday, November 06, 2020 / 3:03 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTVNG
With a huge population of over
160m people and a housing deficit estimated at over 20m, the Islamic Finance
Instruments 'Sadaqah' and 'Waqf' have been described as
veritable tools that could help address the deficit in Nigeria. Mr. Qazeem Adebumiti, a researcher and PhD
student at Universiti
Teknologi Malaysia (UTM), Kuala Lumpur,
Malaysia made this point at a
recent discourse on the non-interest finance market in Nigeria.
He
said the Islamic
finance instruments could provide mass housing that is affordable to Nigerians
nationwide.
According
to him Nigeria at the moment is a country suffering from a housing deficit and
Islamic finance could provide solutions to the problem by improving the
socio-economic situation at the microeconomic level.
Speaking
further he said that Islamic finance instruments can provide an alternative
source of funding to finance mass housing for the people, such that they can
afford decent housing.
He
further stated that both Islamic financial instruments could help in improving
the microeconomic activities in the country, leading to empowerment, financial
inclusion, and the ability to bridge the housing deficit.
On
land issues, he pointed out that through the Waqf Islamic endowment land
could be provided by the endowment and developers and would be affordable.
He
also mentioned that 'Zakat' is another instrument that could address the
housing deficit and make houses accessible to low and middle income earning
families.
The
finance researcher believed that the 'Sukuk' instrument to a large
extent could support the provision of public infrastructure. Looking at
leveraging retail Sukuk, he said Nigeria could learn from Malaysia and
Indonesia that have used it to develop their real sector.
"Nigeria's
population is huge and it is an opportunity for investors to come in. Also,
investment in technology is one of the areas which could open up opportunities
for investors to grow the economy. Technology and fintech are opportunities
needed to tap into the global pool of investible capital" he said.
Islamic Finance according to him has
the potential of deepening financial access to the Northern region that is
predominantly still fragile in regards to access to finance.
He was also of the view that Islamic
finance could support the development of the northern Nigeria regional economy,
which has been characterized by a high level of poverty and unemployment.
The researcher equally noted that
instruments like Qard Hassan which is for loans/savings could be
integrated into the National Social Investment Program (NSIP), aimed at
improving the economic condition of people.
He said the Sustainable Development
Goals was aimed at improving the lives of people but also aligns with the
principles of Islamic finance.
With a projected growth of $5 to $7trn in the next decade, Islamic finance has the potential of supporting Nigeria in its quest to achieve the SDGs by 2030.
"The adoption of Sukuk
is better for an environment like Nigeria and for alleviating poverty. Islamic
finance could support the SDGs in actualizing development, gender inclusion,
and poverty alleviation" he said.
In
terms of Infrastructure Financing, he believed Islamic finance
institutions could do a lot in helping the Central Bank of Nigeria to actualize
some of its economic targets. The Islamic finance institutions according to him
should continue to create awareness and enlightenment on their activities and
their value to the local financial market. The Capital market should be
leveraged more with 'Sukuk' provisions and 'Takaful' covering the
Insurance sector.
On
the part of how Islamic Finance could catalyze Nigeria's socio-economic
development, especially in the area of budget 2021 and even the Economic Sustainability
Plan, he called on the country to look into alternative sources of funding that
the non-interest finance provides.
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