Economy General

Edun explains why FG is eyeing Islamic finance

Mr Wale Edun, the Finance Minister & Coordinating Minister for the Economy

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By Our Correspondent

Finance Minister & Coordinating Minister for the Economy, Wale Edun, says the world could no longer afford the “elevated high levels” of interest-based financing.

Edun made the remarks at a forum organised by the Security Exchange Commission (SEC) and the Islamic Financial Services Board (IFSB) in Abuja.

Citing man-made and natural shocks that have pushed rates beyond rooftops, the minister painted a picture of development constrained by the soaring cost of borrowing.

He said high-interest rates ”make it impossible to access the funds needed for development, infrastructure and even social services”.

He lamented the detrimental impact of the interest rates.

Highlighting the crippling effect, Edun listed infrastructure, education and healthcare as vital areas suffering under the burden of excessive borrowing.

Offering a potential alternative, Edun drew attention to a recent $30 million grant from the United Arab Emirates (UAE).

He said the government dedicated the grant to climate action and adaptation in Nigeria.

“Notably, this grant was funded through Islamic finance principles, hinting at a shift in the landscape of available resources.

”Clearly, funds these days are with those who practice Islamic finance,” the minister said.

”As a Finance Minister, you better follow the money,” Edun declared.

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He urged a deeper understanding and utilisation of Islamic finance, which he described as “a veritable tool for financing development”. He added that IFSB endorsed Islamic finance.

The minister reiterated the imperative of harnessing the potential of Islamic finance as a viable tool for financing development.

With Nigeria’s objective of achieving rapid, inclusive and sustainable economic growth, the minister emphasized the importance of learning from the IFSB.

”We need to educate ourselves to make optimal use of this financing tool,” he said.

According to him, Islamic finance provides an additional avenue through which Nigeria can propel critical economic growth.

Aligning with the vision of President Ahmed Bola Tinubu, the Minister of Finance

Recognising the significance of tapping into Islamic finance to fuel the economy effectively, he noted, is in line with the vision of President Bola Ahmed Tinubu.

The minister’s address further explained the potential advantages of Islamic finance.
He, therefore, encouraged stakeholders to explore this alternative financing model to bolster economic growth in Nigeria.

As government officials strive to diversify the country’s economic landscape, the minister’s stance shows a commitment to expanding opportunities for sustainable development in Nigeria through innovative financial techniques.

 

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