The reason the Federal Government is adopting Islamic finance, as explained by Wale Edun
Wale Edun, the Finance Minister and Coordinating Minister for the Economy, clarified the rationale behind the Federal Government's adoption of Islamic Finance. According to the minister, the global financial landscape can no longer sustain the "elevated high levels" of interest-based financing.
Edun made these remarks during an event held in Abuja, organized by the Security Exchange Commission (SEC) and the Islamic Financial Services Board (IFSB).
The minister highlighted that both man-made and natural shocks have caused interest rates to surge, impeding development due to the exorbitant cost of borrowing. Edun emphasized the adverse consequences of elevated interest rates, stating that they "make it impossible to access the funds needed for development, infrastructure, and even social services." He pointed out the detrimental impact on critical areas such as infrastructure, education, and healthcare that are struggling under the weight of excessively high borrowing costs.
Proposing a possible substitute, Edun highlighted a recent $30 million grant from the United Arab Emirates (UAE) earmarked for climate action and adaptation in Nigeria.
He remarked, "Significantly, this grant was structured based on Islamic finance principles, indicating a changing trend in the pool of accessible resources. Evidently, those engaged in Islamic finance are now holding significant funds. It's wise to follow the money."
Edun advocated for a deeper comprehension and application of Islamic finance, describing it as "a potent instrument for financing development" endorsed by the IFSB (Islamic Financial Services Board).
Edun emphasized the necessity of tapping into the potential of Islamic finance as a practical tool for funding development.
"With Nigeria's aim of attaining swift, inclusive, and sustainable economic growth, the minister underscored the importance of drawing lessons from the IFSB and acquiring knowledge to maximize the use of this financing tool," he stated.
Edun highlighted that Islamic finance offers an extra pathway through which Nigeria can drive essential economic growth.
The Finance Minister acknowledges the importance of leveraging Islamic finance to effectively fuel the economy.
Edun's remarks illuminated the potential benefits of Islamic finance, urging stakeholders to investigate this alternative financing model to strengthen economic growth in Nigeria.
The minister's position reflects a dedication to broadening opportunities for sustainable development in Nigeria through innovative financial approaches.
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