Islamic finance to mobilise Asia, Middle East trade and investment flows

The 3rd Annual World Islamic Banking Conference: Asia Summit (WIBC Asia 2012) opened today at the Grand Hyatt Singapore. The two day WIBC Asia event, held under the official support of the Monetary Authority of Singapore, kicked off with an inaugural address by H.E. Ravi Menon, Governor of the Monetary Authority of Singapore.

Islamic finance to mobilise Asia, Middle East trade and investment flows

His speech was immediately followed by an opening keynote session which featured HE Dr. Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank and Edy Setiadi, Executive Director of the Directorate of Islamic Banking, Bank Indonesia. The session addressed the challenges and opportunities inherent in the increasingly global geographic footprint of Islamic finance and also discussed the national and international initiatives that will ensure consistency and foster greater interconnectedness across key jurisdictions for Islamic finance.

A key highlight was the Power Debate moderated by Haslinda Amin of Bloomberg Television, the session analysed the expanding role of Islamic finance as a conduit for trade and capital flows between Asia and the Middle East and also discussed how Islamic financial institutions can better develop the capacity to structure large-scale multi-currency and cross border transactions.

The Power Debate session featured Toby O’Connor, Chief Executive Officer, Islamic Bank of Asia; Hussain AlQemzi; Chief Executive Officer, Noor Islamic Bank and Group Chief Executive Officer, Noor Investment Group; Muzaffar Hisham, Chief Executive Officer, Maybank Islamic Berhad; Dato’ Jamelah Jamaluddin, Chief Executive Officer, Kuwait Finance House (Malaysia) Berhad (KFH Malaysia); Syed Abdull Aziz Jailani Bin Syed Kechik, Chief Executive Officer, OCBC Al-Amin Bank Berhad; Shamsun Anwar Hussain, Director – Consumer Banking, CIMB Islamic Bank Berhad; and Wasim Saifi, Global Head, Standard Chartered Saadiq, Consumer Banking.

WIBC Asia 2012 continues on tomorrow and will features an exclusive keynote address by Jaseem Ahmed, Secretary-General of the Islamic Financial Services Board (IFSB), and a special address by Daud Vicary Abdullah, President and Chief Executive Officer of INCEIF- The Global University of Islamic Finance.

URL: http://www.cpifinancial.net/news/post/14307/islamic-finance-to-mobilise-asia-middle-east-trade-and-investment-flows


World Islamic Banking Conference: Asia to open 5 June

Asia 2012 will gather more than 450 industry leaders for discussions on strengthening international connectivity and capturing cross-border opportunities in the Islamic finance industry.

Ahead of the event, Badlisyah Abdul Ghani, Executive Director / Chief Executive Officer, CIMB Islamic Bank Berhad, said, “Key markets in Asia and the Middle East are now witnessing rapid growth and expansion – and economies in rapid transition need responsive banking and capital markets. Islamic bankers must understand the evolving needs of its end-users build new capabilities and develop new products and services to support the needs of both mature and new markets. This requires strong integration and economic inter-linkages between the key markets for Islamic finance. Regulatory reforms, governance standards and tax structures need to keep pace with the rapid internationalization of Islamic finance thus enabling greater scope for large-scale cross-border transactions.


World Islamic Banking Conference: Asia to open 5 June

“The annual World Islamic Banking Conference: Asia Summit is one of those unique platforms which aim to foster greater connectivity between Asia and the Middle East thus providing an opportunity for key industry players in these high-growth markets to develop the capacity to structure large-scale multi-currency and cross-border Shari’ah-compliant transactions. We are once again delighted to be supporting this important event.”

The two day event is set to begin on the 5 June with an inaugural address by H.E. Ravi Menon, Governor of the Monetary Authority of Singapore. The inaugural address will be immediately followed by an opening keynote session featuring H.E. Dr. Ahmad Mohamed Ali Al-Madani, Development Bank; and H.E. Dr. Halim Alamsyah, Deputy Governor, Bank Indonesia.

H.E. Ravi Menon, Governor of the Monetary Authority of Singapore, said, “WIBC: Asia has become an important bridge connecting Asia and the Middle East to the growing participants of Islamic finance.  Since its launch in 2010, the event has grown in both size and stature. It is a unique gathering for the industry to discuss trends, share experiences and explore opportunities to tap the full potential of Islamic finance.”

URL: http://www.cpifinancial.net/news/post/14223/world-islamic-banking-conference-asia-to-open-5-june

Islamic, Asian Banks Agree To Funding For Pakistan Wind Power

The Islamic Development Bank and the Asian Development Bank agreed to a $133 million financing plan to develop two wind projects in Pakistan as the nation seeks new renewable sources to overcome power shortages.

Pakistan’s Fauji Foundation, set up as a charitable trust for former servicemen, and the nation’s Tapal Group are backing the projects totaling 100 megawatts, according to a statement on the Islamic Development Bank website.

Pakistani Prime Minister Yousuf Raza Gilani said March 6 the nation has “enormous potential” for wind farms, solar power, geothermal and biofuel energy. Pakistan needs to diversify power sources away from oil and gas to overcome blackouts that beset the country restricting its growth and triggering protests in some cities this month. The gap between power demand and supply surged to a record 7,500 megawatts on May 10, the Geo television channel reported.


Islamic, Asian banks agree to funding for Pakistan wind power

 

National Bank of Pakistan, Faysal Bank Ltd., United Bank Ltd., Allied Bank Ltd. (ABL) and Meezan Bank Ltd. also participated in the long-term lease financing for the parks in Sindh province, southeastern Pakistan, according to the statement. The finance is an Ijara facility, an Islamic finance structure, according to the statement.

Pakistan received private sector offers to build 1,500 megawatts of renewable power, according the country’s Alternative Energy Development Board. A 150-megawatt project in Jhampir in Sindh is already under construction and about 400 megawatts of projects will start this year, according to the government agency website. The nation has about 900 megawatts of wind under construction or with financing agreed upon and 6 megawatts operating, according to Bloomberg New Energy Finance, the London-based industry analyst.

URL: http://www.bloomberg.com/news/2012-05-22/islamic-asian-banks-agree-to-funding-for-pakistan-wind-power.html

Shariah ‘megabank plan’ seeks to raise $1bn capital

Shariah ‘megabank plan’ seeks to raise $1bn capital

The Islamic Development Bank is seeking partners to bring investment in a Shariah-compliant megabank to more than $1bn before the opening this year, allowing it to finance larger construction projects.
The financial institution, to be established with Riyadh-based Dallah Albaraka Group and the Qatari government, will issue securities that Islamic lenders can buy to manage excess funds, IDB president Ahmad Mohamed Ali said in a May 10 interview in Kuala Lumpur. The three parties signed a memorandum of understanding in April to set up the bank in Doha, Qatar, to fund roads, ports and power plants.
“An Islamic megabank will be a significant development,” Afaq Khan, Dubai-based chief executive officer of Standard Chartered’s Islamic unit, said in a telephone interview on Monday. “Such a bank would have the balance sheet, the capital and the underwriting capabilities to undertake significant projects of size.”
Sales of debt that pay returns on assets to comply with the religion’s ban on interest totalled $14bn globally this year, compared with $358bn issuance of non-Islamic bonds, according to data compiled by Bloomberg. Al Rajhi Bank, the world’s biggest Shariah-compliant lender based in Riyadh, Saudi Arabia, has a market capitalisation of $30bn, versus $159bn for HSBC Holdings, Europe’s largest bank.
“The main objective of this bank is to invest in big projects and to help Islamic banks manage their liquidity,” said IDB’s Ahmad. That is one of the biggest challenges facing lenders, he said.
In an effort to increase the range of Shariah-compliant instruments in the market, International Islamic Liquidity Management Corporation was established in October 2010 with a mandate to sell the industry’s first foreign-currency denominated bills. It was founded by 14 members including central banks in Malaysia, Saudi Arabia, and Qatar. The Islamic Development Bank, based in Jeddah, Saudi Arabia, and the Islamic Corporation for the Development of the Private Sector are also among them, according to the IILM website.
The IILM plans to kick-start the issuance with a sale of as much as much as $1bn of global Shariah-compliant dollar bills by the middle of this year, Bank Negara Malaysia governor Zeti Akhtar Aziz, who was previously chairman of the institution, said on March 21.

 

 

An initiative headed by Malaysia to set up Asia’s first Islamic megabank along with organisations in the Middle East has yet to materialise. Zeti said in an interview with Bloomberg in September that indications were that a licence would be granted in 2011. “The review of the applicants is still ongoing,” Bank Negara said in a statement on Friday.
There is no consensus that the industry needs a megabank, Megat Hizaini Hassan, a partner and head of the Islamic finance practice at Kuala Lumpur-based law firm Lee Hishammuddin Allen & Gledhill, said in an e-mail on Monday.
“The megabank may not necessarily be the best or only solution to the existing problems and issues in Islamic finance,” Megat said. “Funding of large-scale projects may be done by syndication involving several Islamic banks or by sukuk sales, while liquidity problems may be resolved via more issuance of short- or medium-term papers.”
Assets in the $1tn Shariah-compliant industry are projected to almost triple to $2.8tn by 2015, according to the Kuala Lumpur-based Islamic Financial Services Board, a standards setting body.
A shortage of sukuk has driven yields on global Islamic bonds down 30 basis points, or 0.30 percentage point, in 2012 to 3.69% on Monday, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index. That compares with an average of 4.16% last year, 5.87% in 2010 and 9.51% in 2009.
The difference between average sukuk yields and the London interbank offered rate, or Libor, widened two basis points on Monday to 252 basis points, the HSBC/Nasdaq index shows.
Global Shariah-compliant bonds returned 3.6% in 2012, according to the HSBC/Nasdaq index, while debt in developing markets climbed 5.5%, JPMorgan Chase & Co’s EMBI Global Composite Index shows.
Malaysia’s $444bn development programme to build railways, power plants and roads over a decade is boosting issuance in the world’s biggest sukuk market this year. Sales rose to a record 13.2bn ringgit ($4.3bn), adding to last year’s all-time high of 75.6bn ringgit, according to data compiled by Bloomberg.
Qatar plans to spend $88bn on building facilities as it prepares to host the soccer World Cup in 2022, the government announced in May last year.
“A megabank would certainly need to have a credible credit rating internationally and this in turn would create another avenue for Shariah-compliant liquidity to be effectively deployed,” Syed Abdull Aziz Jailani Syed Kechik, chief executive officer at Kuala Lumpur-based OCBC Al-Amin Bank, the Islamic unit of Singapore’s Overseas-Chinese Banking Corp, said in an e-mail on Monday. “A credible megabank would have catalytic benefits for the overall market.”

 

URL: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=505800&version=1&template_id=48&parent_id=28

Nigeria: Islamic Development Bank to Invest U.S.$6 Billion in the Country – Executive Director

The Islamic Development Bank (IDB) was formed in October 1975 to foster economic development and social progress of member countries in accordance with Islamic principles. It currently has 56 member countries, Nigeria being the most recent (in 2005) country to become a member. Gambo Shuaibu is an Executive Director at the bank as Nigeria’s representative. In this interview, he said the bank plans to make cumulative investments worth $6 billion in Nigeria in the next three years.

The bank assists member countries in accordance with Islamic principles. Does that mean you don’t give loans? If you do, don’t you charge interest? How does the bank get its investment back?

The bank supports its members in various forms, financially and through technical assistance. It could be grant. There is loan too. The loan is broken into two, ordinary loan and concessionary loan and also through consultancy. Now, when you say in accordance with Islamic principles, it has to do with the way its products are packaged. Interest is forbidden in Islam.

All IDB does is to ensure that its own financial products are packaged in compliance with Islamic laws and basically there is no interest element and they do not finance things that are forbidden Islamically like gambling, prostitution. That is why even hotel business has not been attracting the attention of IDB much due to sale of alcohol. But it does not discriminate against the beneficiary. Only that it has to be structured in a way that it will not contravene the Islamic principles.

There are a number of predominantly Christian countries who are members of the IDB. It doesn’t discriminate who benefit. It is the packaging that differs. In the conventional banks, when you go there to take loan to purchase a house maybe, the main component is interest that you have to pay.

Nigeria has increased its subscription in the bank. How much is that and what is Nigeria’s position in the bank in terms of ranking?

When we first joined, it was at a very insignificant level of 2.2 percent. The increase now is at the level of 7.6 percent of the ordinary shares capital. The figures I gave the other day was the authorized capital which is $30 billion. The shareholding fund of the bank is just about 6.3 billion Islamic dinar which is equivalent to about $10 billion. The shareholding fund includes reserve and profit. The paid up capital is $4.6 billion.

When you are calculating the capital of a multilateral development organization, you have to be very careful. Even that includes cash payment and callable shares. Callable share is the portion of the capital that is just there, that you have subscribed to in principles but there is no financial commitment. In the event, the bank is to raise money in the market, the shareholder supporters are called to provide the money.

That is a basic standard. If you were to do the calculation, it should be half of 7.5 percent of the paid up capital which is at present a little over $6 billion. When the last increase of the paid up capital was done in 2006, a substantial portion of it, 70 percent, is payable over a period of 10 years.

Basically, in the next 10 years, the investment of Nigeria in the bank will be in the region of $400 million. I can assure you, given the project that will be financed by the bank in Nigeria, in the next three years; IDB will have invested $2billion in different facilities in the country. This will be used in education, poverty alleviation and other human capital development related projects.

If IDB is investing $2 billion in Nigeria, it has the capacity to generate counterpart funding up to $4billion. That means, we are targeting $6billion investment in the next three years in Nigeria.

You had spoken about some key projects in certain states where IDB is playing some roles. Can you expatiate on them?

The focus of the bank is economic and social development of the member countries. But before you benefit as a member country, you have to apply. Just as any other bank will not come to you and say ‘come and take loan.’ It’s based on your need that you will apply. Since becoming member and the advocacy that has followed some of the 36 states (in Nigeria) have applied. IDB relates with countries on the basis of sovereignty.

Although, it has affiliates that takes care of private sector interest. IDB deals with the federal, state and local governments. A number of facilities were granted and prominent among them is the ones given to the federal government of Nigeria. At the time of president Obasanjo, there was this food crisis. One of the approaches agreed by the Nigerian government was to work with multilateral agencies; African Development Bank, World Bank, European Investment bank and similar ones that were interested in supporting Nigeria including the Islamic Development Bank. A project called food security was established. It is basically to support food production.

The states applied to get loan from the World Bank, some European banks and the Islamic Development Bank. The states that the federal government approved to access the IDB facilities are Gombe, Yobe, and Anambra states. It was mainly to do with food production; agro allied and anything that will improve the activities of the farmer such as access roads, research institutions, and development of small earth dams, irrigation facilities and warehousing.

These state governments came up with their own project concepts based on their needs and the initial estimate was $50 million for the first phase of the project for the three states. It was after thorough review that the project which takes about 5 years, was reduced to $38 million made available. The states and federal government will also contribute by way of counterpart funding. Then, the figure will become higher.

Kaduna state, when the Vice president was the governor, came up with the Zaria water works which is under construction. The African Development Bank and IDB have interest in it. And also science model schools in each of the three senatorial zones as well as comprehensive health centre are to be built in Kaduna. Facilities were approved for these projects.

The federal government had to come in and also the national assembly for a final clearance. At the moment, it is at the national assembly to get the final clearance for the loans.

We also have Jigawa rural integration project as it is one of the poorest states in Nigeria. IDB is all out to give assistance. Osun and Oyo states, last years, made submissions. That is being worked on now by the bank. There are a number of other states that are talking to IDB.

IDB is planning a business forum in Nigeria next month. What is the bank up to in this direction?

It is normal to inform the general public about the presence of the IDB and its activities. The forum is a form of enlightenment campaign, showcasing IDB as a group. Given the transformation agenda of the federal government there is a prominent role for the private sector. To that extent there is need to ensure that the private sector is adequately involved. The forum is to further enlighten Nigerians on the activities of the IDB and its affiliates especially on how to access its facilities.

Islamic banking recently took off in Nigeria. Given the opposition it is facing especially from the leadership of the Christian Association of Nigeria (CAN), do you think the bank has got prospects of survival?

I think more of an abandoned prospect for the project. If you can recall, the minister of finance and coordinating minister of the economy, Mrs. Ngozi Okonjo-Iweala, when she appeared before the senate committee, this question was asked. She said Islamic banking in Nigeria is another window of banking. That it is quite beneficial. It is not only in Nigeria but even in developed economies.

In the UK, there is the Islamic banking window, also in the United States, Germany, and France. Like the minister said, it is another window of banking allowing some unbanked people to be in cooperated into the sector. Many people because of their belief had refused to participate in banking in Nigeria. This is an opportunity to get them in. Any money that is in the bank is available for the development of the economy.

There is a CBN guideline that states there shall be no discrimination against a beneficiary on the basis of culture, race, religion, language and even in employment, it doesn’t discriminate. That is why there are Christians who are shareholders of the Islamic bank in Nigeria. It is on the basis of this that I feel there is good prospect for the bank.

Is Nigeria rated high at the bank?

Out of the 56 members of the IDB, 27 are from the African continent. Nigerian being a member of OPEC, other members in the gulf region and North Africa also members of the OPEC have been relating with Nigeria before we became member. The membership of Nigeria improved the bank’s assistance to Africa. It will be a voice that once heard will be taken seriously. It is like with Nigeria now, the influence of Africa has gone up at the bank and if you have that influence, then you can also channel the available resources to support the members. The bank has special fund for the development of Africa. It was started in 2008.

I remember the President of IDB, Dr Ahmed Muhammed when I had a meeting with him, what he told me. He said whatever we can do to improve on the position of Africa, in Africa, we will do so. In the course of my discussion with him, he told me that I reminded him of his encounter with the late Nigerian head of state, General Murtala Muhammed in Jedda (Saudi Arabia). They went to market the bank to him for Nigeria to become a member. He said Murtala told him that, ‘ yes, it is a good idea, good concept but Nigeria will only be ready to join if it is in a position to influence the activities of the bank in a way that will aid the development of Africa.’

The special fund for the development of Africa is to mainly focus on the development of the continent. Under the first phase, the Bank has a budget of $12billion; $4 billion directly from the bank and $8 billion from the development partners. Due to the rating of the IDB, any project it is identified in, it attracts the participation of other partners.

http://allafrica.com/stories/201202210236.html

Naira Gains N1.45 as Treasury Bills Yield Declines

Naira Gains N1.45 as Treasury Bills Yield Declines

The naira gained a total of N1.45 against the dollar at the interbank market, last week as it rose to N158.85 to a dollar on Friday, compared with the N160.30 to a dollar it stood last Tuesday.

Dealers attributed the trend to a drop in the demand for the greenback by oil marketers continue to wane. The local currency attained its strongest level at the interbank since two months.

This occurred, just as treasury bills yields offered by the Central Bank of Nigeria (CBN) declined at the auction held last weekend as demand was far higher than the N149.3 billion sold.

In fact, total bid at the treasury bills auction increased by N167.55 billion to N316.85 billion, the highest amount since the November 24 sale.

Bloomberg revealed that the apex bank sold N32.1 billion of 91-day bills at a yield of 14.70 per cent, 9 basis points lower than the 14.79 per cent at the last auction held on January 25. Similarly, the apex bank sold N50billion of 182-day securities at 16.09 per cent, 1 basis point lower than the previous sale as well as N67.2 billion of 364-day notes at 16.89 per cent, 0.3 per cent lower than at the last sale on January 11.

“The consumer inflation rate fell for the first time in four months to 10.3 per cent in December, from 10.5 per cent a month earlier, the National Bureau of Statistics said January 18. With the central bank committed to containing inflation, it appears investors will continue to enjoy attractive returns from purchases of treasury bills,” Chief Economist at FBN Capital Limited, London, said.

The apex bank maintained its benchmark interest rate at a record high on of 12 per cent on January 31 to curb inflation after the government partially removed fuel subsidies, boosting gasoline costs.

However, at the CBN’s regulated Wholesale Dutch Auction System (WDAS) last Wednesday, the naira also climbed by 35 kobo to close at N156.50 to a dollar, stronger that the N156.85 to a dollar it closed last week Wednesday.

The CBN offered a total of $450 million to dealers, compared with the $250 million sold last Wednesday. The apex bank increased its supply at the WDAS to meet the volume of demand because the auction was not held on Monday. The bi-weekly auction did not hold last Monday because of the Muslim public holiday.

Unemployment Rate

CBN Governor, Mallam Sanusi Lamido Sanusi, last week disclosed that while the Nigerian economy grew at the rate of seven per cent for the past five years, unemployment had actually doubled at same period.

Sanusi had also said the current security upheaval and internal insurrection all over the country were as a result of severe poverty and rising unemployment, especially in the north.

The CBN governor had noted that the present development and economic reality in Nigeria, where unemployment was widening at a time of economic growth, was an aberration.

He had said: “According to data from the National Bureau of Statistics (NBS); unemployment rate in 2011 is 29.3 per cent. This means that unemployment has doubled since last five years. Unemployment in Yobe is 60.6 per cent, Kano is 67 per cent and that is why when you go to Kano you will see a sea of people without work. We must make sure we did not begin to see our demography as a curse.”

Sanusi had also said that government needed to rethink and restructure the economic system of the country by creating the enabling environment that encourages industrialisation. He had added that jobs would only be created by establishing industries that rely on little technology but high in productivity similar to the ones adopted by the Chinese and Asian Tigers.

Islamic Development Bank

Minister of State for Finance, Alhaji Yerima Ngama, last week, said that discussions had reached advanced stage between the federal government and the Islamic Development Bank (IDB) to secure a $600 million-loan for infrastructure development in the country.

He had said  the loan which would be on a three to four-year borrowing plan without interest had already passed the screening stages and would soon be made available for federal and state government projects.

The minister had also said there were some criteria yet to be satisfied by government before it could get the funding. For instance, he pointed out that some of the projects, which funding was being sought for had not actually commenced.

But Islamic financing principle would prefer mostly projects which are on-going and have been evaluated to ascertain minimal risks. Ngama had stressed that there was   need to apply for funds ahead of time.

Executive Director, Islamic Development Bank (IDB), Gambo Shuaibu, had said IDB’s authorised capital had just been increased to about $30 billion with Nigeria investing about 7.8 per cent of the amount over a period of 10 years.

He said the forthcoming forum had become necessary given the country’s level of investment in the multi-lateral development finance institution.

Jaiz Bank

THISDAY last week reported that after months of controversy generated by the introduction of the non-interest banking in the country, also known as Islamic banking, Jaiz Bank Plc quietly opened its doors for business on Friday, January 6, 2011 in Abuja.

According to THISDAY, the bank, which has its head office in Kano House, Central Business District, Abuja, had been offering banking services for about a month, same for its branches in Kaduna and Kano which were also opened simultaneously.

Jaiz’s eventual emergence followed repeated failures in the past to begin operations more than five years after it launched itself into the public consciousness to raise funds from the capital market.

The bank, which has as one of its promoters a former chairman of First Bank of Nigeria Plc, Alhaji Umaru Mutallab, was actually incorporated on April 1, 2003 as a public limited liability company with an authorised share capital of N2.5 billion.

The CBN had announced on June 20, 2011 that it had issued Jaiz Bank an approval-in-principle to operate as an Islamic bank – the first financial institution to be so licensed. It was thereafter, given six months to comply with the apex bank’s capitalisation requirement, among other criteria, in order to receive the final licence.

Financial Reporting Council

The Financial Reporting Council of Nigeria (FRC) said it had sought the co-operation of the CBN in ensuring effective enforcement of financial reporting guidelines in the country.

The FRC had said the move would also address the challenges associated with implementation of International Financial Reporting Standards (IFRS). The Executive Secretary, FRC, Mr Jim Obazee, explained that the collaboration would address issues concerning the implementation of IFRS.

Obazee particularly mentioned embedded insurance contract in banking products, fully provisioned loans reclassified to memorandum account, CBN policy in respect of 55 per cent restriction on revaluation surplus of property, plant and equipment versus International Accounting Standards 16 property, plant and equipment.

In his response, Sanusi had also called for a collaborative effort by financial regulators in the implementation of IFRS. Sanusi agreed that the FRC should be participating in the activities of the Financial Services Regulation Coordinating Committee (FSRCC), even as the statement quoted the CBN Governor to have expressed surprise that the Council was not a regular member of the body. He had also charged the FRC to be prepared for the bureaucratic bottlenecks that may be encountered in registration of professionals.

Cassava Production

The Federal Ministry of Agriculture and Rural Development last week said disclosed plans to partner Thai Tapioca Development Institute of Thailand (TTDI) in cassava production and marketing.

Acknowledging the challenges facing the nation’s farmers in getting market for their cassava, Minister for Agriculture and Rural Development, Dr. Akinwumi Adesina, had said the ministry, under the Transformation Agenda, was poised to ensure that necessary steps are taken for Nigerian farmers to have access to improved variety of cassava as well as create market, since an increase demand for cassava would stabilise price for farmers.

Adesina had stressed that Nigeria had zero per cent in the Global Value of cassava, while the country remained number one in its production.

He had argued that Nigeria had a lot to learn from Thailand who is number three in cassava production yet the largest exporter of the crop in the world.

The minister had also explained that the partnership between Nigeria and Thailand would bring about optimum utilisation of cassava that Nigeria has in abundance.

Power Projects Minister of National Planning, Mr. Shamsuddeen Usman, last week said that the federal government was in talks with the European Investment Bank to secure funding for the Calabar-Kano gas pipeline and the Mambilla power projects under the ministries of Petroleum Resources and Power, respectively.

THISDAY reported that the Africa-EU Union Trust Fund exists to, among other things, fund various projects that support economic growth. Specifically, the Mambilla power project, which consists of three dams, is estimated to cost US$3.2 billion and had been in the pipeline since 2005 when the feasibility study was reviewed.

And the Calabar- Kano gas pipe line project or the Trans-Nigeria Gas Pipeline is the domestic segment of the proposed Trans-stream gas pipeline for gas supply from Nigeria to Europe, meant to diversify export routes for marketing Nigeria’s natural gas and strengthen regional cooperation.

Usman had said the two projects would add value to Nigeria as well as make life easy for Nigerians through the enhancement of economic opportunities for the country.

External Reserves

Nigeria’s external reserves, which have been bullish since this year, due to the upswing in oil prices in the international market had improved significantly by a total of $1.803 billion in the last five weeks.

THISDAY had reported that showed that the growth recorded by the forex reserves, represented an increase by 5.5 per cent, from $32.915 billion as at December 30, 2011, compared with its current position of $34.718 billion as at February 2.

THISDAY findings had further shown that the last time the reserves stood around its current value was on September 15, last year, when it rose to $34.86 billion.

Thereafter, it had hovered around the region of $32 billion and $33 billion. It however closed last year at a low level of $32.9 billion, which was 0.6 per cent less than the $33.1 billion it attained in the corresponding period of 2010.

Experts had attributed the build-up in the forex reserves to the upbeat recorded by oil prices in the international market since this year as well as the moderate demand for forex at the CBN’s official forex market –the WDAS.

http://www.thisdaylive.com/articles/naira-gains-n1-45-as-treasury-bills-yield-declines/109153/

Islamic Banking: Nigeria seeks loan from IDB

Nigeria is in talks to secure a $600 million no-interest loan for infrastructure work from the Islamic Development Bank (IDB) , Minister of State for Finance Yerima Lawan Ngama said on Thursday.

Ngama said the loan would be repaid in three to four years, adding that the country’s application for the facility has passed the IDB scrutiny and received positive approval from the Board.

The minister while addressing journalists in Abuja during a meeting with delegates from the IDB said the new loan application will exclude the $370 million private sector loan already extended to Nigeria by the IDB for other developmental project.

According to the minister, the $600 million loan is intended for “investment in social infrastructure and power like the provision of turbines for the Zungeru power station.”

Ngama added that the facilities will also be used for the construction of health centres; urban and rural water works; housing and rehabilitation of some state universities.

“The facility will attract no interest and has a long repayment plan long enough for the recovery of the investment before repayment,” he said.

Nigeria became a member of the Islamic Development Bank in 2005. The country currently holds a $30 billion authorised share capital and an equity stake of $2.28 billion representing 7.6 per cent in the Bank.

Event to shed light on latest trends in Islamic finance

MUSCAT: Under the patronage of Darwish bin Ismail bin Ali Al Balushi, minister responsible for financial affairs, the Sultanate of Oman will host the first ‘Islamic Finance & Banking Conference’, from January 23 to 24, at Al Bustan Palace Hotel, here.

 

The event, organised by Al Iktissad Wal-Aamal Group, in collaboration with the Central Bank of Oman, will highlight key issues relevant to the Islamic finance industry, which includes policies and regulatory perspectives of Islamic finance, Islamic banking growth and international expansion, Islamic finance and capital market activities, supervisory and regulatory role of Sharia boards and the socio-economic accountability of Islamic finance.

Prominent speakers who will speak on the latest trends in the sector include Hamood Bin Sangour Al Zadjali, executive president of the Central Bank of Oman; Sultan bin Nasser Al Souwaidi, governor of the Central Bank of the United Arab Emirates; Raed Charafeddine, first vice-governor of the Central Bank of Lebanon; and Adnan Youssef, chairman of the Union of Arab Banks.

Dr Ahmad Mohammed Ali, president of the Islamic Development Bank, will be heading a high-level delegation. He will deliver a keynote speech at the conference’s opening ceremony.

400 participants

Conference sessions will reveal latest research and studies accomplished by a group of prominent specialists, academics and senior staff in the financial and Islamic banking sectors, from diverse regional and international leading organisations and corporations in the Islamic financial industry.

About 400 participants will gather at the event from various Arab and Islamic countries including Islamic and commercial banking leaders, fund managers, Sharia and legal experts, representatives of foreign banks and investment firms and world-level consultants, in addition to a large number of participants interested in Islamic banking. The conference is sponsored by Al Ahli Bank, Oman, Diamond sponsor, among others.

http://www.zawya.com/story.cfm/sidZAWYA20120118070542/Event_to_shed_light_on_latest_trends_in_Islamic_finance_in_Oman

GLOBAL: Business schools turn to Islamic finance

As unemployment levels remain high in the West, finance students are being encouraged to gain expertise in Islamic banking so that they will be able to work in the Gulf states and in the wider Islamic world.

Universities are also exposing students to other non-conventional and ethical finance models that include eco-finance and micro-finance.

While universities in the United Kingdom and France have offered Islamic finance programmes for some years because of their large Muslim populations, Spain is also increasingly looking into these programmes.

The Instituto de Empressa (IE) business school in Madrid has been offering Islamic finance programmes for five years and partnered with Saudi Arabia’s King Abdul Aziz University (KAU) to launch the Saudi-Spanish Center for Islamic Economics and Finance (SCIEF) earlier this month.

Speaking at the event, Dr Ahmad Mohamed Ali Al Madani, head of the Islamic Development Bank, said the financial crisis had raised people’s concerns beyond profit margins into where their money is invested. Al Madani was acting rector of KAU from 1967 to 1972 and was Saudi Arabia’s deputy minister of education in the 1970s.

Business schools needed to respond accordingly and Spain was in a good position to do this considering the country’s Arabic heritage, he said.

“You look around and find that Islamic institutions are in the hundreds. Amounts of the assets are in the billions. The system proved that it can support economic systems and respond to big demand from people in different parts of the world.”

Professor Ignacio de la Torre, IE’s academic director of the masters in finance programmes, said at the SCIEF launch that there is already US$1 trillion of Islamic money, and that it is growing at 20% with US$200 million of additional Islamic money coming in every year.

“When you travel to the Gulf, where 50% of banking has been Islamised, there are not enough people with skills and understanding of Islamic finance,” he said.

He added that, from a career perspective, students would be wise to have knowledge of this area because those who work in conventional finance will sooner or later be faced with Islamic finance.

Due to the increasing focus on Islamic finance globally, the subject is now mandatory for masters in finance students, said Dr Celia de Anca, director of the centre for diversity at IE business school.

“We’ve been teaching it as an elective for five years and now it is mandatory because we realise the world of finance is changing so much that students and future financial managers should know more about what’s going on,” she said.

Students were showing an interest in sustainability in finance, ethics in finance and ecological finance and the school is looking into developing specialisations in alternative finance, de Anca said.

A number of UK universities have a strong tradition in Middle East studies and more recently in Islamic finance. At Durham University, Islamic finance programmes have been offered for more than 25 years, Durham Centre for Islamic Economics and Finance director Dr Mehmet Asutay said at the Madrid launch.

The university has the largest PhD programme in Islamic finance as well as masters degrees in arts and in science in the field.

“In addition to Muslims coming from all over the world to the centre, we have English German, Italian and Spanish students,” he said.

The field is not without its challenges. Professor Simon Archer of the Henley University of Reading’s International Capital Market Association said the area was relatively new and “there is not a wealth of excellent textbooks”.

Archer added: “Research literature is sparse and spread over a number of different journals and not tremendously accessible.”

In addition, there were “opportunistic” universities in the UK that have responded to the need for programmes with varying levels of quality.

http://www.universityworldnews.com/article.php?story=20111216131700252

Islamic banking on growth path, says expert

MUSCAT: The Islamic banking system now mushrooming throughout the world will continue to grow to the point of becoming a parallel financial system for investors seeking an alternative to the existing global interest-based capital market dominated by Western banks, a top Islamic banking expert said.

“With more countries racing to take a share in the booming takaful industry (Islamic insurance) which is expected to reach $25 billion globally by 2015, it is a good idea and needs to be explored further,” Professor Abu Nasser Mohammed Abduz Zaher, Islamic Bank Bangladesh Ltd (IBBL) chairman, told Times of Oman.

The chairman, currently on a visit to the Sultanate, was all praise for Oman and its ruler His Majesty Sultan Qaboos bin Said for permitting Islamic-based financial instruments to operate in Oman.

“On behalf of Bangladesh and the Islamic Bank Bangladesh, we would like to express our highest appreciation for His Majesty the Sultan for the developments taking place in the country and especially to the bold decision to permit Sharia-compliant financial institutions,” he said.

“We are confident that with the level of education and government’s wisdom coupled with deep-rooted culture based on Islam, we believe the decision is absolutely correct and time is opportune for Oman to get into Islamic mode of banking,” he added.

Offering support to Oman the chairman said, “The Jeddah-based Islamic Development Bank (IDB), being our central bank globally, has referred our bank for providing expertise to countries like Nigeria and Uganda to train their Islamic banking employees.

If we are asked for help from Oman, we are more than willing to play a role with our vast experience in the domain of Sharia-compliant banking provisions.”

The chairman said that the establishment of Islamic Bank in Bangladesh was a boon for the people of the country as the bank has earned the confidence of the businessmen, industrialists and general people. People have reposed total confidence on the truth and efficiency of Islamic bank.

Today, the Islamic banks are fast penetrating into every nook and corner of the country and even conventional banks have opened Islamic windows and exclusive Sharia-compliant branches because the people of Bangladesh are convinced that the future lies in Sharia-compliant institutions.

Regarding the bank’s business in Bangladesh, he said that the IBBL has opened 10 new branches by the end of November this year, taking the total number of branches to 261.

It also plans to gradually open more branches covering important economic and commercial places both in urban and rural areas. Islamic Bank Bangladesh Limited is rated by Credit Rating Information and Services Limited (CRISL).

Professor Abu Nasser is so confident of the further growth of the bank that he said, “The trust is so much that people deposits money in Islamic Bank Bangladesh without any second thoughts and henever we open a branch in a town, average deposit on the first day of the opening would register around four million takas.”

http://www.timesofoman.com/innercat.asp?cat=&detail=52824&sec=news