Posted by LERE OJEDOKUN, Abuja on
ANOTHER vista to capital projects' financing in Nigeria was opened yesterday as the Federal Executive Council (FEC) approved subscription of 250 shares, worth N420 million at the Islamic Development Bank (IDB).
ANOTHER vista to capital projects' financing in Nigeria was opened yesterday as the Federal Executive Council (FEC) approved subscription of 250 shares, worth N420 million at the Islamic Development Bank (IDB).
Council also endorsed award of water supply and irrigation contracts, valued at over N2.3 billion.
Finance Minister, Dr Ngozi Okonjo-Iweala informed State House correspondents, after the weekly meeting, chaired by President Olusegun Obasanjo, that the shares' subscription was mandatory as part of the completion process of the country's membership of the bank.
She said although Nigeria started the process of membership of the Jeddah, Saudi Arabia-based bank in 1999, the right to consolidate and access credit facilities was premised on subscription of shares at 10,000 Islamic dinars each.
"Since it became a member in 1999, what was left was to subscribe to our shares in the bank so that we could consolidate and access resources of this bank which has its base in Jeddah. Council approved that we subscribe to 250 shares of the capital stock of the bank with per value of 10,000 Islamic diners each.
"It is roughly an equivalent of about N420 million that we would have to subscribe to in order to complete the process of our membership in this institution. With the approval, we can now proceed to complete that process so that we can also be members and have access to resources from the institution," the minister explained.
Mrs Okonjo-Iweala further disclosed that the country would be required to pay 20 per cent of the amount (N84 million) while the remaining 80 per cent (N336 million) would be paid in four instalments.
In terms of accessing facilities, the minister said apart from being interest-free, in line with Islamic dictates, government would limit its borrowing to a prudent level.
Her words: "First of all, these are concessionary resource. As you know, the Islamic bank practice is not to charge interest but they have ... you participate in whatever profit sharing that happens within the bank. We probably would access that to finance capital projects. We do not have any amount set in mind yet, but as you know, we are limiting our borrowing to very, very prudent levels".
Mrs Okonjo-Iweala, while stating that the bank was like other international financial institutions such as the African Development Bank (ADB), World Bank and International Finance Corporation (IFC), disclosed the country's participation in IDB's annual meetings.
One of the meetings is holding in Malaysia before the end of this month.
Minister of Information and National Orientation, Chief Chukwuemeka Chikelu, on his part, justified the nation's membership of the bank, stressing that no economy can develop on its own.
"No economy can develop without access to capital and for many years, particularly since the Economic Management Team (EMT) came on board, part of what they have done is to continue to expand and strength avenues for Nigerians to access capital from financial institutions," he said.
Also, minister of state for Water Resources, Alhaji Bashir Awotorebo said council approved contract for the expansion of Water irrigation project in Kano State at the cost of N1.95 billion.
The contract which would cover 655 hectares of land, he noted, was to enhance the administration's efforts on food security, poverty eradication and job creation.
It has a 26-month completion date.
Another highlight of the meeting was approval of N354.5 million water supply contract for the University of Abuja (UNIABUJA) permanent site and staff quarters which is expected to be completed within seven months.
Minister of Science and Technology, Prof. Turner Isoun also disclosed that council endorsed the joint memorandum of four ministries to make computer literacy compulsory at all levels of education.
Ministries of Information and National Orientation, Science and Technology, Communications and Education sponsored the proposal