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Sunday, November 17, 2019 / 08:00PM
/ Bukola Akinyele for Proshare WebTV / Header Image Credit: Proshare WebTV
Standardization and increased awareness
are part of the key elements that will facilitate the growth of Islamic
Finance in Nigeria. The Senior Director and Head of
Treasury and Financial Institutions of the African Finance Corporation,
AFC, Mr. Banji Fehintola, said on a Proshare WebTV programme, Islamic
Finance Weekly.
Mr. Fehintola noted that from a global perspective, Islamic finance still suffers from standardization problems preventing it from keeping pace with conventional Eurobonds. He also noted that the issue of premium that is often demanded by investors must be addressed to deepen the product.
He
believed Islamic Finance should become widely accepted in the global financial
market, and viewed it as a potential mainstream source of financing.
The Head of Treasury and Financial Institutions for the AFC, also called for increased awareness of Islamic Finance in Nigeria, through conferences, seminars, thought-leadership columns, research reports and media campaigns.
Fehintola
stressed the need for Nigerians to understand the value and provisions of the
product, which is geared towards deepening financial inclusion and driving
economic prosperity.
At
a time when Nigeria faces a huge infrastructural deficit, Fehintola emphasized
the need for the nation to tap into the opportunities that Islamic Finance
provides to scale its financing of critical infrastructure projects across the
country.
Speaking
on Sukuks that have been issued to the tune of N200bn by Nigeria in the past
two years, he said they were successful. Sukuk was a positive development in
terms of deepening the local capital market, he argued.
He
lauded the Nigerian government for taking the lead in adopting the Islamic
Finance product in the country.
"Nigeria
has taken a great step in terms of issuing Sukuk, and they are planning to
issue the third one. Also, with time we will see corporate issuances in the
Sukuk space," Fehintola said.
On the issue of Issuing foreign-denominated Sukuks, he identified the United Kingdom and South Africa as nations that have issued them.
Mr.
Fehintola said the AFC has been at the forefront of pushing and tapping into
the liquidity provided by Islamic Finance.
He
informed WebTV that a couple of years ago, the AFC got a line of finance from
the Islamic Development Bank (IDB). He also noted that there had been a robust
collaboration between AFC and IDB across projects.
"In
terms of other sources of Islamic finance about three years ago, we issued our
first Sukuk bond 100% lower by our structure, along the line of that
financing we were able to tap investors in Malaysia, other parts of Asia and
the middle east and it was an opportunity for us to diversify our funding and
to tap into a big pool of Islamic funding" He said.
Fehintola
also believed that beyond the Islamic financial institutions and the
Islamic investor base, all hands must be prepared to help Nigeria bridge its
infrastructure gap.
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