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Infrastructure: ICRC seeks framework for Islamic bonds

Citing the success stories of Islamic finance in infrastructure development the world over, the Director General of the Infrastructure Concession Regulatory Commission, Engr. Mansur Ahmed, has called for a regulatory framework that could facilitate such successes in Nigeria.

"The critical imperatives for the successful issuance of Islamic bonds (otherwise known as Sukuk) in Nigeria will include the right regulatory and taxation framework, transparent transaction structure, credit rating, marketing, risk and mitigation measures, appropriate technical capacity and guarantees," the ICRC DG said on Monday at a meeting with other regulators in the Nigerian financial sector.

According to him, bridging the about N32trillion infrastructure requirement in Nigeria spanning numerous sectors including transportation, power, water supply, education, housing and health, is beyond what the public sector can afford, hence the need to explore other alternative financing avenues.

Ahmed described Sukuk as particularly well suited for the Public Private Partnership endeavours of the federal government for upscaling the nation's level of infrastructure.

"Sukuks are becoming important means of funding large scale investment projects around the world, while for investors; the Sukuk market provides greater potential for diversification into new asset classes. Sukuk has matured into a diversified, internationally accepted instrument to raise corporate finance for acquisitions or working capital purposes, or use in the transportation sector, real estate, infrastructure construction and petrochemical projects in several countries," he explained.

In his contribution, CBN Governor, Mallam Sanusi Lamido Sanusi, noted if properly harnessed, Sukuks would contribute to the effort of the ministry of finance to raise funds from international markets and diversify sources of funding for projects critical to national development.

He enjoined relevant government agencies to develop trusts and securities laws that would enhance smooth operations of Sukuk and provide a level playing field for participants in the capital market.

Also speaking, Director General of the Debt Management Office, Dr. Abraham Nwankwo canvassed extensive information, communication and education of the public and potential players in the capital market for the success of Islamic bonds.

The meeting which also had in attendance representatives of the DG of SEC, the Managing Director of Lotus Capital, Mrs. Hajara Adeola and representatives of the MD of Jaiz Bank, agreed to set up a technical team to study the Islamic bond option further.
-Ends-

© Press Release 2011

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