IDB presence in Abuja offers new funding window for businesses

The recent opening of Islamic Development Bank (IDB) in Nigeria has been described as a positive window that could be explored by various tiers of governments in the quest to re-inflate the ailing economy.

According to experts, the presence of the bank in the country also has the potential of encouraging Nigerian businesses dealing in Muslim consumer goods and lifestyle to maximise the anticipated global growth in the sector.

The opening of the Nigerian office of the global IDB is coming on the heels of a report prepared by ‘Thomson Reuters’ in collaboration with a Dubai-based private group ‘Dinar Standard’ that indicates that the Muslim consumers goods and lifestyle sector would grow by 9.5 percent this year.

The report also states that the monetary growth of the sector would reach estimated $3.7 trillion mark in 2019, from the estimated $2 trillion it reached in the previous year.

In the same vein, the estimated compound growth of the sector is put at over 10 percent, Nigeria at the moment despite having one of the largest Muslim congregation in the world, is a minimal player in Islamic economy.

A further dissection of the report obtained by BusinessDay shows that global Islamic Finance Assets in its core market is expected to grow beyond the current N4.2 trillion marks.

The global Islamic Finance Assets was put at N1.66 trillion in 2013, Islamic funds and Sukuks led the growth in the sector by 14 percent and 11 percent in year-on- year, while the banking sector experienced drop of 5 percent in assets.

“Key areas of opportunities across the Halal Food value chain are: Halal Food SMEs seeking Islamic financing for working capital, trade financing and expansion needs, M&A opportunities; organic and pure/wholesome new products, Halal ingredients, building global or regional brand that deliver on Halal integrity.

“Islamic Finance key opportunities includes: convergence of Islamic Finance/ capital with Halal food and lifestyle sectors, Socially Responsible Investments (SRI) Funds as well as wider impact investment and social entrepreneurship financing hajj/umrah savings and funds,” the report notes

Outlining some of the benefits of the presence of IDB in Nigeria, Aliyu Musawa, a Kano-based Islamic economy expert, says the decision to open the office at this material time is a welcome development.

Musawa charges Nigerian businessmen to take advantage of the presence of the bank in the country by becoming knowledgeable in the workings of the Islamic economic model.

Musawa explains that contrary to the negative notion of some Nigerians about what Islamic economy is all about, the mode of the economy is open to all players irrespective of religion and ethnic group.

“One of the positive development that has happened in our country since the advent of this administration is the recent opening of IDB regional office in Abuja.

“The opening of the office will provide opportunity for public sector players, as well as individuals and institutional private players in the nation’s economy to access cheap fund required in growing the economy,” he says.