The Nation Newspaper

Tag: rescue

  • I met only N1,500 in LG account, says Chairman

    I met only N1,500 in LG account, says Chairman

    The Chairman, Mubi North Local Government in Adamawa, Alhaji Musa Bello, said on Monday that he met only N1,500 in the account of the local council when he assumed office.

    Bello told newsmen in Mubi that he also inherited a liability of over N200 million.

    “I met only N1,500 in the council’s account and a liability of over N200 million, while the Internally Generated Revenue of the council, then, was N150,000 weekly,’’ the chairman said.

    According to him, he had to use his experience as a former councillor in the local government to mobilise the business community to pay appropriate taxes, to shore up the council’s internal revenue.

    Bello noted that at the time, the council had faced drastic revenue shortfall which made it difficult to even pay salaries.

    “We set up a committee and were able to boost the local revenue, which we use in executing a lot of projects within the short period we assumed office,” he said.

    According to him, the local council had drilled 13 boreholes and rehabilitated 104 others using internally generated revenue.

    He listed some of the projects executed by his administration to include evacuation of drainage to avert flooding and construction of six feeder roads.

    Bello said that activities were picking up after the insurgency which affected social and economic activities in the local government.

    He said that residents were waiting for government to carry out rehabilitation and reconstruction programmes, as pledged by the Presidential Committee on North East.

    Bello commended the state government for the construction and rehabilitation of 14 roads in Mubi town.

    “I also want to commend the contributions of Non-Governmental Organisations, National Emergency Management Agency, Victims Support Fund, North East Regional Initiative, UNICEF, Red Cross, Rescue, Oxfam and others.

    “I commend foreign countries that have been assisting our people in various areas including health, education, water supply and sanitation,’’ he said.

    The chairman also lauded the contributions of the military and other security agencies which facilitated the return of peace to the area.

    “The council is always in touch with the military and other security agencies to ensure the sustenance of peace, ’’ Bello said.

  • Jubilee housing scheme: PPP to the rescue

    •Brains & Hammers bankrolls project

    Determined to continue with its housing initiative, but faced with scarce financial resources, the Lagos State Government has embraced the public-private partnership (PPP) alternative to bring the scheme to fruition.

    To this end, the state government, earlier in the week, finalised agreement with a development firm, Messers Brains & Hammers Limited, for the development of the 618 housing units at the Jubilee Estate in Iganmu. The project is designed to drive urban redevelopment in the area which will engender increased property values in the surrounding environment, thereby re-positioning the current site to one  highly sought after.

    Going by the cosmopolitan nature of Iganmu, the Jubille Housing Estate is estimated to create 3,590 direct jobs and about 7,000 indirect jobs in the area. Iganmu is dominated predominantly by the informal sector operators such as artisans, labourers, traders and food vendors.

    The estate, upon completion, will house 96 units of two-bedroom flats; 414 units of three-bedroom flats and 108 units of four-bedroom terrace houses. In addition to adequate parking facilities and excellent infrastructure, the development will include a well-equipped club house with a swimming pool, recreational areas and landscaping.

    Following the signing of the Memorandum of Understanding (MoU), the development of the estate will begin next month, with a projected duration of 60 months from the receipt of all required approvals and permits.

    The Commissioner for Housing, Mr. Gbolahan Lawal, at the signing of the  MoU with Messrs Brains and Hammers Limited in his Alausa office, Ikeja, explained that the initiative, which was mooted by the administration of Governor Akinwunmi Ambode as part of activities to celebrate the 50th anniversary of the creation of the state, will stand as a symbol of the celebration for many decades to come.

    Lawal disclosed that the housing deficit in the state stands at over three million. Therefore, he further explained, in order to bridge this gap, about 200,000 housing units must be delivered annually in the next five years. This requirement, he emphasised, cannot be delivered alone by the government; hence the need to inject private capital into housing delivery. To achieve this purpose, the state government has made land available to prospective private developers who have exhibited technical and financial capabilities for the delivery of affordable housing units.

    “The Jubilee Estate project is a PPP between the Lagos State Government, represented by the Ministry of Housing and IBILE Holdings Limited on one hand and Brains & Hammers, one of the foremost housing developers in the country on the other hand. The state stands to derive significant internally generated revenue through the taxes that will accrue from the sale of housing units and will also benefit from Land Use Charge and other statutory payments for property,” Lawal explained.

    The Chief Operating Officer of Brains & Hammers, Mr. Ibrahim Wushishi, explained that while the firm will be leveraging on the latest construction technology to deliver the project, he nonetheless expects challenges. “The potential challenges with the site are two-fold. Firstly, the terrain is challenging for construction but over the years Brains and Hammers has developed the skill and competence required to provide quality construction regardless of terrain. We are leveraging on the best available technology in the form of vibro-flotation which will be used to stabilise the soil and prepare it to take large structures safely and securely. The second challenge we envision is being able to keep up with demand for the housing units. Due to the strategic location, we have been inundated with demand. As we are only able to build a total of 618 housing units currently, we are saddled with the limited supply and very heavy demand,” he explained, adding that the firm will be working with Lafarge Africa, who are recognised as the largest producers of building materials globally, including working with some of the proprietary technology in the form of specialised and customised concrete

    He revealed that the estate will be serviced by a stand-alone sewage treatment system that will have the required capacity and functionality to meet the needs of the estate in an environmentally-friendly manner, without recourse to other facilities in the area. Similarly, there is a plan to provide an integrated power system for the estate. This encompasses dedicated electricity supply from the local power provider and on-site power generation which will be augmented by a solar-powered solution. Wushishi said this will ensure value for money for residents and ensure carbon emissions are kept to a minimum in line with the new order of climate change.

    While Lawal signed for the state government, Messrs Adebola Sheidu, chairman of Brains and Hammers and Abubakar Sheidu, company secretary, witnessed for the company.

  • Financing infrastructure: Islamic Bond to the rescue

    Financing infrastructure: Islamic Bond to the rescue

    The Federal Government has an ambitious plan to fix the deficit in infrastructure, especially in roads, power and railways, with the N7.44 trillion 2017 Budget.  It hopes to finance the budget largely with borrowed funds. COLLINS NWEZE reports that the  government is eyeing a  N100 billion (about $300 million) Sukuk (Islamic Bond) to fix targeted developmental projects. 

    The stage is set for the Federal Government to sell a N100 billion (about $300 million) sovereign Sukuk (also known as Islamic Bond) this month. The target is the local market.

    The government, which is relying on loans to fund this year’s N7.44 trillion Appropriation, is taking advantage of the friendly terms to approach the Islamic finance market.

    The Islamic finance market is growing globally. This phenomenal growth is despite the poor recovery in other segments within the world’s financial markets.

    The International Monetary Fund (IMF) has linked the rapid growth of Islamic banking in developing countries to its relative resilience to financial crises, contrary to the developments in conventional banking. Thus in the next two to three years, Shariah-compliant assets are expected to sustain a double-digit growth.

    The government plans to inject the funds into road projects and to fund the Budget of Economic Recovery & Growth which was signed last week by Acting President, Yemi Osinbajo.

    According to the budget details, the Federal Government plans to borrow about $10 billion from the debt markets, with about 50 per cent of the fund coming from foreign sources. It is to fund a budget deficit worsened by lower oil prices at the international market, a development that has weakened the Naira and forced the government to readjust spending. The government’s plan is to fund more than half of its budget deficit of N2.36 trillion from local borrowing and to tap concessionary sources to fill its funding needs. It has opened talks with the World Bank since last year.

    The Sukuk is based on an Ijara structure. Ijara is a common leasing arrangement in Islamic finance, which bans payment of interest. Sukuk have become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf Region and Southeast Asia.

    The Islamic bond with a seven-year tenor will go on sale on June 28 for three days via book building. It will be tradable on the Nigerian Stock Exchange (NSE) and on FMDQ over-the-counter platform. The bond issuance will be guided by the Debt Management Office (DMO) under Abraham Nwankwo as Director-General.

    Nigeria is home to the largest Islamic population in sub-Saharan Africa, with a reasonable percent of its N180 million people as Muslims. It is also home to one of Africa’s fastest-growing consumer and corporate banking sectors.

    Islamic finance means a situation in which corporations, including banks and other lending institutions, raise capital in accordance with the Sharia, or Islamic law.

    The bond issuance remains part of government’s plan to fast-track the development of infrastructure and engage in project-tied capital raising, given that Nigeria has challenges with road, railway and power infrastructures.

    Nigeria is not new to Sukuk. In 2013, Osun State issued N10 billion worth of Sukuk, but no other Sukuk transaction followed.

    The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for the corporate world to follow. The target of the offer are retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.

    The Osun example

    In October 2013, the Osun State government issued a N10 billion Sukuk yielding 14.75 per cent, bankers said. The Osun State bond was the first Islamic bond from a major economy in sub-Saharan Africa.

    The cocoa-producing southwestern state of Osun got N11.4 billion in total subscriptions for its seven-year paper, from asset managers and Islamic funds, bankers said.

    Sukuk has become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf and southeast Asia. The Sukuk bond was issued in accordance with enactment of the Osun State Bonds, Notes and Other Securities Law 2012 and setting up the Osun Sukuk Company Plc. Though Islamic in nomenclature, Sukuk bond, is a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The bond was issued in accordance with the Security and Exchange Commission’s (SEC’s) rules and regulations.

    The redemption of the bond being used to finance roads and school constructions across the state will be due in 2020.

    Authorising and approving the offer at a board meeting for the Sukuk Company, Osun State Governor, Ogbeni Rauf Aregbesola explained why his administration opted for Sukuk bond. He described it as an opportunity to develop the state. He appealed to the people to see the bond as an avenue to attract development to the state for the benefit of all and sundry.

    Other African countries including South Africa, Kenya and Senegal also plan to issue Sukuk. The Gambia has been selling small amounts of Islamic Bond for several years.

    Local credit rating agency Agusto & Co gave an ‘A’ rating to the Sukuk, suggesting it will attract ample investor demand. Bankers have also said that Osun hoped the issue, would be bought by both local pension funds and international investors.

    Speaking on the bond issuance, Currencies Analyst at Ecobank Nigeria, Olakunle Ezun said the Sukuk allows government to raise funds for specific targeted developmental projects that will add value to the lives of the people.

    He explained that Islamic bond has the potential of improving liquidity in the capital market and creating wealth for more investors even as the bond offers investors collectable returns in the form of profit from sale, rental or combination of both.

    The Sukuk, he added, also serves as tool for risk management as the bond has relatively low risk profile, as the investors are always confident of recouping their investments without fears of losing their funds.

    It has strong appeal to ethical investors, who are able to benefit from the investment opportunities that Sukuk offers to institutional investors. Besides, bond holders can trade their investment for cash anytime they so desire to bring more people into the financial system in line with the financial inclusion project approved by the Central Bank of Nigeria (CBN). He said the Sukuk appeals to Islamic faithful and other investors interested in reaping good returns from their investments.

    The Managing Director of Cowry Assets Management limited, Johnson Chukwu, said the Sukuk allows the people who do not want to invest in interest-bearing instruments to participate.

    Chukwu said: “The Sukuk bond will meet the investment need of large population of Nigerian that do not want to invest in interest-bearing instruments. It will attract funds from people that have refused to invest in other debt instruments because of their values. It will bring more people into the financial system.”

    According to him, Sukuk can play an important role in the development of an Islamic market and banking system.

    An Islamic scholar, Abiodun Rasaq, said prospects for Islamic finance are very bright, adding that the finance system has become necessary given a very significant proportion of Nigeria population strongly believe that based on the nature of the capital market and the dictates of their religion, they cannot invest in the market.

    He called for the development of products that is attractive to these set of investors to allow easy flow of their funds into the market.

    Chukwu said that just as some Christians also do not like certain things like alcohol, or invest their money in companies producing arms and ammunitions or gambling firms, some Muslims also prefer Islamic finance that is interest-free.

    He disclosed that Nigeria’s profile as Africa’s most liquid debt market after South Africa has been rising since JP Morgan and Barclays, included its bonds in their sovereign bond indices, encouraging greater foreign participation in its debt market.

    He said the use of Islamic finance in Africa could grow further as several north and sub-Saharan African countries including Morocco, Tunisia, South Africa and Kenya are laying the legal groundwork to be able to issue Sukuk.

    Other stakeholders believe that Sukuk provides an ideal way of financing large projects for the public good. “There are many economic activities or projects that are out of reach of individuals, companies, or, in the case of various developing Islamic economies, governments. In these cases, sukuk are perfect for financing these projects without falling into interest-based debt,” he said.

    Also, investors on the secondary market that are looking for investments that can be liquidated easily will find that Sukuk are ideal.

    How Islamic finance works

    Islamic finance is an interest-free banking plan. When Muslim cleric Abubakar Usman told his entrepreneur friend Ahmad Yusuf that sharia law forbids paying interest on borrowed funds, it surprised the later. Yusuf, an Osun State cocoa merchant quickly returned N1 million loan he got from a commercial bank to the lender and approached the fast-growing industry of Islamic banking.

    Islamic banking is a market that has doubled in size in the past five years. Its worth has been estimated above $2 trillion, with a demand forecast that it will soar to new heights in the coming months.

    After repaying the loan a week after securing it from a commercial bank, Yusuf said: “A cleric told me it is not permissible under Islam to take loans from a non-Islamic bank because they charge interest.”

    A few days later, he arranged for a loan from an Islamic bank after paying a $100 service charge. Islamic banking customers, aside being mainly Muslims, are attracted to Islamic finance by its flexibility, link to real economic activity and its ban on transactions involving speculation or uncertainty.

    Islamic finance is gaining ground in the country. Besides Nigeria, global acceptance for Islamic finance is increasing by the day despite initial hitches to its survival. According to Standard & Poor’s (S&P), Islamic finance remained a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centers and their various regulatory frameworks.

    The rating agency said it believed that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take center-stage beginning from 2014.

    The newcomers in the industry — such as Oman, Turkey, and Nigeria, for instance — have been tracing the footsteps of fast-growing pioneers, such as Malaysia.

    “Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront,” it said.

     

    CBN’s regulation

    With local commercial banks facing cash crunch over dwindling oil revenue and increasing need to shore up their capital bases, the time to promote Islamic finance, analysts said, is now.

    Hence, many people saw it coming when the apex bank in 2015, issued guidelines for an advisory body that will oversee Islamic banking in the country.

    An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the apex bank. The bank is to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.

    Also, section 9.1 of the CBN Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria provides for the establishment of an advisory body at the CBN on Islamic banking and finance.

    The body shall be called the Financial Regulation Advisory Council of Experts (FRACE). The Council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective e regulation and supervision of NIFIs in the country.

    With the policy guidelines, the CBN has become the latest regulator to opt for a centralised approach to the Islamic banking industry.

    Traditionally, Islamic banks have practiced self-regulation when ensuring that their products follow religious principles. But a centralised model of supervision is increasingly being favoured across the world.

    Financial institutions that offer Islamic banking products are required to have their own boards of Sharia finance experts, who are limited to serving in one institution at a time. The advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.

    Capital base

    The CBN guidelines on non-interest banking peg the minimum capital base at N10 billion for National Islamic Banks and N5 billion for regional Islamic banks. However, the regulator allows deposit money banks to offer non-interest banking products, using existing structure such as the branches, even manpower.

    The CBN has so far registered Jaiz Bank and it has given a licence to Stanbic IBTC Bank to operate Islamic banking window. Sterling Bank also has approval to operate an Islamic window. This is in addition to the work being done by National Insurance Commission to promote Takaful, an Islamic insurance product.

    Analysts believe that many Islamic financial markets had established their presence in all the major financial centres and were playing key roles in deepening the financial markets with products across the globe.

    They insist that in the face of the growing network  in  the global financial system and its integration, it is unrealistic for any existing or aspiring financial centre to be oblivious of this development.

  • Financing infrastructure: Islamic Bond to the rescue

    Financing infrastructure: Islamic Bond to the rescue

    The Federal Government has an ambitious plan to fix the deficit in infrastructure, especially in roads, power and railways, with the N7.44 trillion 2017 Budget.  It hopes to finance the budget largely with borrowed funds. COLLINS NWEZE reports that the  government is eyeing a  N100 billion (about $300 million) Sukuk (Islamic Bond) to fix targeted developmental projects. 

    The stage is set for the Federal Government to sell a N100 billion (about $300 million) sovereign Sukuk (also known as Islamic Bond) this month. The target is the local market.

    The government, which is relying on loans to fund this year’s N7.44 trillion Appropriation, is taking advantage of the friendly terms to approach the Islamic finance market.

    The Islamic finance market is growing globally. This phenomenal growth is despite the poor recovery in other segments within the world’s financial markets.

    The International Monetary Fund (IMF) has linked the rapid growth of Islamic banking in developing countries to its relative resilience to financial crises, contrary to the developments in conventional banking. Thus in the next two to three years, Shariah-compliant assets are expected to sustain a double-digit growth.

    The government plans to inject the funds into road projects and to fund the Budget of Economic Recovery & Growth which was signed last week by Acting President, Yemi Osinbajo.

    According to the budget details, the Federal Government plans to borrow about $10 billion from the debt markets, with about 50 per cent of the fund coming from foreign sources. It is to fund a budget deficit worsened by lower oil prices at the international market, a development that has weakened the Naira and forced the government to readjust spending. The government’s plan is to fund more than half of its budget deficit of N2.36 trillion from local borrowing and to tap concessionary sources to fill its funding needs. It has opened talks with the World Bank since last year.

    The Sukuk is based on an Ijara structure. Ijara is a common leasing arrangement in Islamic finance, which bans payment of interest. Sukuk have become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf Region and Southeast Asia.

    The Islamic bond with a seven-year tenor will go on sale on June 28 for three days via book building. It will be tradable on the Nigerian Stock Exchange (NSE) and on FMDQ over-the-counter platform. The bond issuance will be guided by the Debt Management Office (DMO) under Abraham Nwankwo as Director-General.

    Nigeria is home to the largest Islamic population in sub-Saharan Africa, with a reasonable percent of its N180 million people as Muslims. It is also home to one of Africa’s fastest-growing consumer and corporate banking sectors.

    Islamic finance means a situation in which corporations, including banks and other lending institutions, raise capital in accordance with the Sharia, or Islamic law.

    The bond issuance remains part of government’s plan to fast-track the development of infrastructure and engage in project-tied capital raising, given that Nigeria has challenges with road, railway and power infrastructures.

    Nigeria is not new to Sukuk. In 2013, Osun State issued N10 billion worth of Sukuk, but no other Sukuk transaction followed.

    The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for the corporate world to follow. The target of the offer are retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.

     

    The Osun example

    In October 2013, the Osun State government issued a N10 billion Sukuk yielding 14.75 per cent, bankers said. The Osun State bond was the first Islamic bond from a major economy in sub-Saharan Africa.

    The cocoa-producing southwestern state of Osun got N11.4 billion in total subscriptions for its seven-year paper, from asset managers and Islamic funds, bankers said.

    Sukuk has become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf and southeast Asia. The Sukuk bond was issued in accordance with enactment of the Osun State Bonds, Notes and Other Securities Law 2012 and setting up the Osun Sukuk Company Plc. Though Islamic in nomenclature, Sukuk bond, is a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The bond was issued in accordance with the Security and Exchange Commission’s (SEC’s) rules and regulations.

    The redemption of the bond being used to finance roads and school constructions across the state will be due in 2020.

    Authorising and approving the offer at a board meeting for the Sukuk Company, Osun State Governor, Ogbeni Rauf Aregbesola explained why his administration opted for Sukuk bond. He described it as an opportunity to develop the state. He appealed to the people to see the bond as an avenue to attract development to the state for the benefit of all and sundry.

    Other African countries including South Africa, Kenya and Senegal also plan to issue Sukuk. The Gambia has been selling small amounts of Islamic Bond for several years.

    Local credit rating agency Agusto & Co gave an ‘A’ rating to the Sukuk, suggesting it will attract ample investor demand. Bankers have also said that Osun hoped the issue, would be bought by both local pension funds and international investors.

    Speaking on the bond issuance, Currencies Analyst at Ecobank Nigeria, Olakunle Ezun said the Sukuk allows government to raise funds for specific targeted developmental projects that will add value to the lives of the people.

    He explained that Islamic bond has the potential of improving liquidity in the capital market and creating wealth for more investors even as the bond offers investors collectable returns in the form of profit from sale, rental or combination of both.

    The Sukuk, he added, also serves as tool for risk management as the bond has relatively low risk profile, as the investors are always confident of recouping their investments without fears of losing their funds.

    It has strong appeal to ethical investors, who are able to benefit from the investment opportunities that Sukuk offers to institutional investors. Besides, bond holders can trade their investment for cash anytime they so desire to bring more people into the financial system in line with the financial inclusion project approved by the Central Bank of Nigeria (CBN). He said the Sukuk appeals to Islamic faithful and other investors interested in reaping good returns from their investments.

    The Managing Director of Cowry Assets Management limited, Johnson Chukwu, said the Sukuk allows the people who do not want to invest in interest-bearing instruments to participate.

    Chukwu said: “The Sukuk bond will meet the investment need of large population of Nigerian that do not want to invest in interest-bearing instruments. It will attract funds from people that have refused to invest in other debt instruments because of their values. It will bring more people into the financial system.”

    According to him, Sukuk can play an important role in the development of an Islamic market and banking system.

    An Islamic scholar, Abiodun Rasaq, said prospects for Islamic finance are very bright, adding that the finance system has become necessary given a very significant proportion of Nigeria population strongly believe that based on the nature of the capital market and the dictates of their religion, they cannot invest in the market.

    He called for the development of products that is attractive to these set of investors to allow easy flow of their funds into the market.

    Chukwu said that just as some Christians also do not like certain things like alcohol, or invest their money in companies producing arms and ammunitions or gambling firms, some Muslims also prefer Islamic finance that is interest-free.

    He disclosed that Nigeria’s profile as Africa’s most liquid debt market after South Africa has been rising since JP Morgan and Barclays, included its bonds in their sovereign bond indices, encouraging greater foreign participation in its debt market.

    He said the use of Islamic finance in Africa could grow further as several north and sub-Saharan African countries including Morocco, Tunisia, South Africa and Kenya are laying the legal groundwork to be able to issue Sukuk.

    Other stakeholders believe that Sukuk provides an ideal way of financing large projects for the public good. “There are many economic activities or projects that are out of reach of individuals, companies, or, in the case of various developing Islamic economies, governments. In these cases, sukuk are perfect for financing these projects without falling into interest-based debt,” he said.

    Also, investors on the secondary market that are looking for investments that can be liquidated easily will find that Sukuk are ideal.

     

    How Islamic finance works

    Islamic finance is an interest-free banking plan. When Muslim cleric Abubakar Usman told his entrepreneur friend Ahmad Yusuf that sharia law forbids paying interest on borrowed funds, it surprised the later. Yusuf, an Osun State cocoa merchant quickly returned N1 million loan he got from a commercial bank to the lender and approached the fast-growing industry of Islamic banking.

    Islamic banking is a market that has doubled in size in the past five years. Its worth has been estimated above $2 trillion, with a demand forecast that it will soar to new heights in the coming months.

    After repaying the loan a week after securing it from a commercial bank, Yusuf said: “A cleric told me it is not permissible under Islam to take loans from a non-Islamic bank because they charge interest.”

    A few days later, he arranged for a loan from an Islamic bank after paying a $100 service charge. Islamic banking customers, aside being mainly Muslims, are attracted to Islamic finance by its flexibility, link to real economic activity and its ban on transactions involving speculation or uncertainty.

    Islamic finance is gaining ground in the country. Besides Nigeria, global acceptance for Islamic finance is increasing by the day despite initial hitches to its survival. According to Standard & Poor’s (S&P), Islamic finance remained a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centers and their various regulatory frameworks.

    The rating agency said it believed that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take center-stage beginning from 2014.

    The newcomers in the industry — such as Oman, Turkey, and Nigeria, for instance — have been tracing the footsteps of fast-growing pioneers, such as Malaysia.

    “Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront,” it said.

     

    CBN’s regulation

    With local commercial banks facing cash crunch over dwindling oil revenue and increasing need to shore up their capital bases, the time to promote Islamic finance, analysts said, is now.

    Hence, many people saw it coming when the apex bank in 2015, issued guidelines for an advisory body that will oversee Islamic banking in the country.

    An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the apex bank. The bank is to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.

    Also, section 9.1 of the CBN Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria provides for the establishment of an advisory body at the CBN on Islamic banking and finance.

    The body shall be called the Financial Regulation Advisory Council of Experts (FRACE). The Council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective e regulation and supervision of NIFIs in the country.

    With the policy guidelines, the CBN has become the latest regulator to opt for a centralised approach to the Islamic banking industry.

    Traditionally, Islamic banks have practiced self-regulation when ensuring that their products follow religious principles. But a centralised model of supervision is increasingly being favoured across the world.

    Financial institutions that offer Islamic banking products are required to have their own boards of Sharia finance experts, who are limited to serving in one institution at a time. The advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.

    Capital base

    The CBN guidelines on non-interest banking peg the minimum capital base at N10 billion for National Islamic Banks and N5 billion for regional Islamic banks. However, the regulator allows deposit money banks to offer non-interest banking products, using existing structure such as the branches, even manpower.

    The CBN has so far registered Jaiz Bank and it has given a licence to Stanbic IBTC Bank to operate Islamic banking window. Sterling Bank also has approval to operate an Islamic window. This is in addition to the work being done by National Insurance Commission to promote Takaful, an Islamic insurance product.

    Analysts believe that many Islamic financial markets had established their presence in all the major financial centres and were playing key roles in deepening the financial markets with products across the globe.

    They insist that in the face of the growing network  in  the global financial system and its integration, it is unrealistic for any existing or aspiring financial centre to be oblivious of this development.

  • Real sector: Sectoral forex allocation to the rescue

    Real sector: Sectoral forex allocation to the rescue

    The 60 per cent special foreign exchange (forex) allocation to manufacturers may have raised their capacity. This has prompted the Central Bank of Nigeria (CBN) to extend the initiative to Small and Medium Enterprises (SMEs) operators. Experts say this can be the wedge for this troubled segment of the real sector, if effectively monitored and enforced. CHIKODI OKEREOCHA and OKWY IROEGBU-CHIKEZIE report. 

    It has been particularly tough for real sector operators, especially those in the Small and Medium Enterprise (SME) segment. For long, they watched helplessly as the crisis in the foreign exchange (forex) market hit hard on their businesses. Because of scarcity of forex, many of them could not fund the importation of essential but eligible raw materials and finished goods critical to their operations.

    Given that SMEs were crowded out of the forex market, many of them who could not stand the heat either disappeared from the manufacturing landscape or scaled their operations, leading to massive job losses. This has been the situation since mid-June 2014 when global oil prices began declining, forcing a number of fiscal and economic distortions on SMEs’ operations.

    Some of the distortions included drop in foreign earnings, decline in foreign reserves and an unstable macro-economic environment among others. The crisis in the forex market, which was also a fallout of the oil price crash, was, perhaps, the most devastating for real sector operators, especially SMEs.

    The crisis was also an addition to the multitude of business environment-related woes plaguing SMEs, such as lack of electricity supply, rising inflation, declining consumer purchasing power, multiple taxation, weakening manufacturing base and policy inconsistency, among others.

    However, a turnaround in the fortunes of this segment of the real sector appears to be in the offing. This is sequel to the recent unveiling of a special form X by the Federal Government through the Central Bank of Nigeria (CBN) to ease access to forex for SMEs.

    On the strength of the intervention, which came on stream about two weeks ago, SMEs were granted special consideration for $20,000 to import essential but eligible raw materials and finished goods critical to their operations.

    CBN spokesman Isaac Okorafor explained that the purpose of the intervention was to ease the difficulties encountered by small manufacturers. He said the Manufacturers Association of Nigeria (MAN) acknowledged that the earlier 60 per cent forex allocation to the sector raised their capacity hence, they canvassed more forex to be made available for SMEs.

    Last year, the CBN waded in to avert the collapse of more companies by creating a 60 per cent special forex allocation window for manufacturers. This was after manufacturers, through several representations and stakeholders’ engagements, sought the creation of a special forex window to allow them fund the importation of raw materials.

    MAN President and arrowhead of the advocacy Dr. Frank Udemba Jacobs lamented that the inclusion of essential raw material inputs for manufacturing in the CBN import prohibition list forced many outfits to close shop and relocate to neighbouring West African countries.

    The CBN in June 2015 announced a forex policy that restricted importers of 41 items from accessing its official window. Even those who export products that fall under the 41 items listed in the CBN circular were barred from using their export proceeds to fund the importation of their raw materials, which were unfortunately classified as not valid for forex.

    The CBN had explained that the policy was necessary to promote locally-produced goods, build robust foreign reserves, and also create jobs. “…..We needed to aggressively begin the process of feeding ourselves and producing much of what we need in this country.

    “The huge amounts of money the country spends on importing things we can produce locally have become a significant drag on our foreign exchange reserves …,” CBN Governor Godwin Emefiele said.

    But manufacturers and other members of the Organised Private Sector (OPS) kicked, arguing that the forex restriction was “obnoxious, superfluous, and ill-conceived’’. They also pointed out that the vague nature in which the items in the import prohibition basket were described in the circular impeded the access of several local manufacturers to forex for procurement of raw materials.

    Following persistent requests by real sector operators, the CBN directed that a special 60 per cent forex allocation window be set aside for manufacturers. The apex bank said that the gesture was to address an observed imbalance in the sector, as a negligible proportion of forex sales were being channelled towards the manufacturing sector.

    Obviously encouraged by the success of the intervention, manufacturers were said to have requested for its extension to SMEs. The request, according to Okorafor, was examined and the result of the examination showed that indeed, SMEs were being crowded out of the forex market hence the need for steps to address their challenges.

    The Nation learnt that with the opening of the special window, genuine SME operators are no longer patronizing or sourcing forex through unofficial windows. By extension, this has reduced the pressure on either the Bureau de Change operators (BDCs) or any other unofficial sources.

    However, the special forex window for SMEs was the latest of such sectoral forex allocations by the CBN aimed at stabilizing the value of the naira and galvanising the real sector, which is credited with the capacity to create jobs and engender economic growth and development.

    For instance, the CBN created a special forex window for investors and exporters on April 21, 2017. This was to boost liquidity in the forex market and ensure timely execution and settlement of eligible transactions, which included invisible transactions such as loan repayments, loan interest payments, dividends, income remittances, capital repatriation, management service fees and consultancy fees.

    Other transactions on the eligible list are software subscription fees, technology transfer Agreements, personal home remittances including ‘miscellaneous payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.

    The invisible transactions under this window excluded international airlines ticket sales’ remittances. CBN said the window covered bills for collection and any other trade-related payment obligations, which are at the instance of the customer.

    It clarified that the permitted invisible transactions and bills for collection were eligible to purchase forex sourced from the CBN forex window limited to secondary market intervention sales (SMIS) wholesale, which is spot and forwards sales.

    “International airlines ticket sales’ remittances shall only be eligible to access the CBN FX window (SMIS-Retail and Wholesale) spot and forwards. The supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to Naira,” CBN’s Director, Financial Markets, Dr. Alvan Ikoku, explained.

    Like the forex intervention for SMEs, the special forex window for investors and exporters was music to real sector operators. For instance, the Lagos Chamber of Commerce & Industry (LCCI) has applauded the policy, noting that its significance lies in the widening of the scope of the market in forex transactions.

    LCCI Director-General Mr. Muda Yusuf said the policy was an important step towards the restoration of normalcy to the foreign exchange market as it signposts the easing of restrictions in the forex market.

    Yusuf said the policy has implications for the economy because of its capacity to boost the confidence of foreign and domestic investors while also moderating the effect on the country’s risk.

    He also said it will impact positively on the liquidity in the forex  market by impacting positively on forex inflows from the autonomous sources, increase transparency in non-oil export transactions and further reduce pressure on foreign reserves as autonomous inflows increase.

    The LCCI DG listed other benefits to include improvement in the stock market performance, positive impact on investment growth, and reduction in the transparency problems and sharp practises that exist in the foreign exchange market.

    Besides, the policy, he said, would significantly check the phenomenon of round tripping including the reduction in the gap between the official rate and parallel market exchange rates.

    Yusuf said: “We seek the cessation of the multiple windows in the forex market. Multiplicity of windows hurts the economy. The CBN could intervene from time to time to modulate the rates in a manner consistent with its capacity.

    “Investors need to be assured of CBN’s commitment to a market-based exchange rate policy as enunciated in the Economy Recovery and Growth Plan (ERGP) of the Federal Government”. He, however, stressed the need to review the CBN’s policy restriction on 41 items.’’

    Similarly, a financial expert, Dr. Uche Uwaleke, believes that the policy will encourage return of portfolio investors to the capital market.

    According to Uwaleke, who is Head of Banking and Finance Department, Nasarawa State University, Keffi, the new policy will impact positively on the capital market with more portfolio investors returning to the market.

    He noted that constraints in the forex market caused illiquidity in the market, leading to exit of foreign investors from the capital market.

    “CBN’s conscious attempt to ease forex access through a special window for foreign investors promises to impact the capital market positively with more portfolio investors returning to the market,’’ Uwaleke stated, adding that the development has brightened Nigeria’s chances of re-admission into the JP Morgan Index.

    Earlier last November, the CBN granted manufacturers access to over $660 million foreign exchange through the inter-bank forex market to source raw materials and spare parts for their industries. The apex bank was emphatic that the intervention was in keeping with its promise to strengthen the real sector of the economy.

    The Chairman, Apapa branch of Manufacturers Association of Nigeria (MAN), Mr. Babatunde Odunayo, described CBN’s interventions in the real sector as “welcome development.” He said such gestures would bring some relief to manufacturers affected by the restrictions on the sourcing of forex.

    Encouraged by the anticipated positive spin-offs from such interventions, the CBN has vowed to sustain its intervention in the forex market. The apex bank believes that this would not only stabilise the value of the naira, but also galvanise the real sector.

    The CBN boss noted that the country’s foreign reserve currently stands at $31 billion, and that the increasing strength of the nation’s foreign reserve is giving CBN the necessary firepower to play in the forex market.

    “You will all have observed that in the last two months, CBN has been involved in some form of intensive intervention in the forex market and this has fortunately resulted in a downward trend in the parallel market price of foreign exchange, Emefiele said, shortly after a closed door meeting with Senate President Bukola Saraki, in Abuja.

    Continuing, he vowed, “We are going to continue this intervention because the reserve looks very good. Our reserve stands at above $31 billion and that provides us enough of firepower or ammunition to be able to defend the currency and we will do so with all intensity to ensure that foreign exchange is procured by everybody.

    “You want to import raw materials, you will get foreign exchange, you want to import plant and equipment you will get foreign exchange, you want to pay school fees or you are a small business that wants to buy foreign exchange for you to import your small items you will procure foreign exchange.”

    However, there are fears that CBN’s sustained sectoral interventions particularly in the real sector where it now targets SMEs might fail to make the anticipated impact unless they are backed by proper monitoring, supervision and enforcement.

    Perhaps, to demonstarte its resolve to make it work this time, the CBN on Tusday

    suspended 12 banks from participating in the weekly forex intervention to the SMEs.

  • Buhari vows to rescue Chibok girls

    Buhari vows to rescue Chibok girls

    President Muhammadu Buhari has restated the Federal Government’s commitment to securing the release of the remaining pupils of Government Secondary School, Chibok, Borno State, abducted by Boko Haram insurgents.

    This was contained in a statement by his Special Adviser on Media and Publicity, Femi Adesina, on the occasion of 1,000th day of the girls’ abduction.

    He said: “We are grateful to God that on this landmark day, we are not completely in the depths of despair, but buoyed with hope that our daughters will yet rejoin their families and loved ones.

    “Three of them have been recovered by our diligent military, while the freedom of 21 others was secured through engagement with their captors. We are hopeful that many more will still return as soon as practicable.”

    The President reiterated that the government would not spare any effort to reunite the girls with their families.

    “I salute the fortitude of the distraught parents. As a parent also, I identify with their plight. Days turned to weeks, weeks turned to months, months turned to years, and today, it is 1,000 days. The tears never dry, the ache is in our hearts. But hope remains constant, eternal, and we believe our pains will be assuaged. Our hopes will not be shattered and our hearts will leap for joy, as more and more of our daughters return. It is a goal we remain steadfastly committed to,” the President stated.

    He hailed those who have been in the vanguard for the recovery of the girls, both nationally and internationally, adding: “Someday soon, we will all rejoice together. Our intelligence and security forces are unrelenting, and whatever it takes, we remain resolute.

    “Chibok community, Nigeria, and, indeed, the world, will yet rise in brotherhood, to welcome our remaining girls back home. We trust God for that eventuality.”

  • Police kill four suspected kidnappers in victim’s rescue

    Police kill four suspected kidnappers in victim’s rescue

    The police have killed four members of a gang that kidnapped a doctor at St. Francois Hospital in Onikan, Lagos, last week.

    They were gunned down inside Ibeju-Lekki forest on Friday during a police operation to rescue the doctor.

    The police, it was learnt, recovered a gun, the vehicle used to kidnap the doctor, and clothes believed to belong to other victims.

    Police spokesperson Dolapo Badmos, a Superintendent (SP), said Dr Ajayi was rescued around 9:10pm. He has been reunited with his family.

    She confirmed that the kidnappers kept him inside the forest.

    “The command would do everything within its means to rid Lagos of criminal elements,” said Badmos.

  • Redemptive governance to the rescue?

    Nigeria remains politically and developmentally in the wilderness, due to poor leadership and governance challenges. Nigerians still pray for Nigeria in distress, knowing that prayer “has great powers to produce results.” But Nigeria’s resort to prayer, simply underlines that governance fails when it’s not redemptive; Karl Marx’s contention that “religion is the opiate of the masses,” notwithstanding.  It’s now obvious that turning Nigeria requires redemptive governance; a non-partisan coalescing of various individuals – sufficiently bold and selflessly honest – “men who possess opinions and a will” to rethink Nigeria’s remediation modalities and indeed, make Nigeria functional again.

    As Nigeria hobble under recessionary pressures and sustainable livelihood becomes a gargantuan challenge, religion becomes a thriving industry replete with dupes and false prophets.  In Nigeria’s depressed economy, this state of play validates the contention that “God dey, is the poor man’s prayer.”  Yet Nigeria’s present realities underpin the enormity of her challenges; plus the fact that the nation and those entrusted to bring about that change, are all struggling badly.  If change reflects success, little of it abounds in Nigeria. The initial flush of collective optimism, exhilaration and bravura has waned; and trickle down dividends of democracy are slow in coming. Nigeria’s governance problem is that the ‘change’ bar might have been set too high; beyond what Nigeria’s weak leadership, weak institutions, weak infrastructure and weak resolve can deliver.  Oddly, the Buhari administration has an articulated vision, purpose and governance strategies; and the ‘right’ set of people, with the requisite credentials. Thus, it remains incomprehensible why it’s difficult to turn around Nigeria, with the fundamentals of good governance seemingly in place. Balanced analyses point to the need for clarity, absence of organisational capability to deliver on purpose and absence of effective stakeholder engagement, as mitigating factors.

    Stagflation makes addressing the country’s present challenges difficult, even as Nigeria’s leadership insists that the country must look beyond oil. Vacillation in oil prices still makes nonsense of planning and budgeting. The challenges are worsened by a political and leadership class averse to making personal sacrifices. Also, national interest has disappeared from the national lexicon, thus rendering every policy measure suspect. Secondly, a combination of poor infrastructure, poor electricity supply and growing unemployment compound present challenges.  Third, Nigerian legislators refuse to be frugal.  Fourth, while financing agriculture is a viable option, the agribusiness blueprint seems opaque in the absence of synergy; thus making it almost impossible to reduce food importation by 2019. Likewise the remediation of decrepit infrastructure remains arduous.  Absence of policy synergy between the federal government and the state and local governments also pose continuing challenges. Despite recent bailouts, only four states are economically viable and the six states that did not receive bailouts are now all heavily indebted. While the federal government tries to address burgeoning national debt, the states in parallel opposite, continue borrowing. Such unchecked borrowings compound Nigeria’s intractable foreign exchange challenges and growing contingent liabilities.

    As, observed recently by SBM Intelligence, most Nigerian states failed “to diversify their economies by developing human capital and levering on the substantial resources they possessed. The result has been powerful governors beholden to ostentatious living, bloated public work-forces, with its attendant wage demands; fully 80% of the states owe salaries.”  As state governments seek refunds for resources they used on rehabilitating decrepit federal infrastructures; the same states also spend enormous fiscal resources in underwriting logistical and financial support for federal law enforcement agencies, with hardly any recompense from Abuja. These awkward realities inevitably compel demands for restructuring. Most of the 2017 draft budgets presented by the federal and state governments are largely improbable; very few are zero-based and very few will be funded and implemented fully. Insofar as the federal and state governments strangulate the local governments by fiats, challenges will subsist; just as UNIDO has proclaimed Nigeria’s SMEs “Ignorant of certain investment and technological skills” required to liberate the country from the claws of the current recession.”

    Oddly, those who dare to advise or criticize the Buhari government are being pummelled with counter-criticisms. Although we are in a democracy, Presidential aides have become pointlessly defensive, combative and shockingly impolitic and pushback against any advice or criticisms.  Government has thus lost sight of the divide between jibes by its traducers and exhortations from well-meaning Nigerians. For its own edification, the Presidency needs to commission some policy preceptors  to explore the constructive role of three 13th century figures – Robert of Sorbon, a churchman; Etienne Boileau, a bourgeois; and Simon de Nesle, an aristocrat – that jointly orchestrated the transfiguring of French politics by fostering redemptive governance during the reign of King Louis IX.  It is worrying that midway into President Muhammadu Buhari’s first term, most of his initial supporters having “changed’, are jumping ship and his erstwhile allies are realigning for 2019; convinced that he won’t be catalytic to the electoral outcome. Electoral trends in Gambia, Ghana and Nigeria that swept aside underperforming leaders remain instructive.  As Kingsley Moghalu, noted, “Nigeria’s fiscal crisis in a world of low oil prices can be addressed only through a constitutional redesign that devolves decision-making to units that will have economies of scale.”  Ditto Nigeria’s governance challenges.

    Nigerians are suffering and need a catharsis chockfull with redemptive governance and smart power leadership not influenced ethno-political considerations. Nigeria should retool its leadership advisory and decision-making methods. Nigeria needs people in public offices, who no longer need the pecks of government, but whose counsel the government can’t do without. Former U.S. Vice-President Walter Mondale served as the 24th U.S. Ambassador to Japan from 1993 to 1996. Such public service, patriotism, and leadership are rare in Nigeria, where politics and public service are self-indulgent.  If President Buhari’s remaining tenure must yield tangible results, there must be a rethink aimed at redemptive governance.  If the process starts with a cabinet reshuffle, so be it. Still. Since constitutional guarantee of social justices seem not to suffice, we should perhaps resort to philosophical-theological dictates of the Holy Books. This proposal isn’t in favour of dogmatic governance, but biased towards governance that is people-oriented; which substitutes rhetoric and promises with compassion and promotes justice and common good instead of divisive policies.

     

    • Obaze is MD/CEO of Selonnes Consult Ltd.

  • Gambling to the rescue?

    •Youths’ fixation with sports betting and older folks’ resort to lottery may not help anyone

    Sports betting and lottery are not illegal businesses. Indeed, they are legitimate ventures, which pay taxes to the government, reward the entrepreneurs that run the businesses and offer fair hope of winning, for the thousands of players that engage in the endeavour.

    So, though moral purists may squirm at the current virtual explosion in sports betting among the youth, and lottery among the older generation, it is nonetheless a fair economic activity, without which not a few would come to grief.

    Therefore, there can be no question of stigmatising such activity solely on the moral plane, or even attempting to criminalise it on the basis of moral disapproval. That would take legitimate food off the table of many.

    Still, there is something downbeat for a society, young and old, which significant members feel their economic salvation lies in sports betting and lotteries, no matter the high promise they tend to hold, in times of economic throes.

    There is something even more condemnable about banks integrating lottery, with not a few banks now pitching customers to deposit some minimum sum, in anticipation of some big payout, via lottery! These are the same banks that are not giving loans to business concerns or give them at outrageous interests! What a way to grow depositors’ fund!

    A magazine report, in The Nation Saturday of October 22, painted a rather grim picture of youths, the not-so-old and even housewives engaged in sports betting, lottery and allied activity.

    More worrying, the people involved rhapsodized betting and lottery, with not a few housewives pinching money from their housekeep allowances to play; and testifying that winning from such engagements come handy to supplement household allowances. The flip side: what happens in the case of losses, even if, to be fair, the amount could be as low as N20? Who accounts for that deficit?

    For the younger elements, sports betting would appear like killing two birds with a stone: enjoy the best of foreign leagues, widely beamed on television; and make some money on the sidelines.

    If it is any consolation, Prof. Mabayoje Aluko, a sociologist quoted in the story, maintained wide-spread sports betting (a moral blot in the eyes of many) seems to have subdued internet fraud (clear crime in the eye of the law).

    Yet, there is something deeply unwise in leaving one’s fortune to chance. In a recessed economy, that could be a double-edged sword: a win produces temporary relief, that can only move the player near addiction; while a lose could lead to starkness and hopelessness. That could cause depression and, if not well taken care of, suicide.

    Both — temporary relief that ties the player to betting addiction and loss-pushed depression, that could trigger suicide — are bad for any society. They would appear tragedy waiting to happen, and are best nipped in the bud.

    What is more? Not a few among the impressionable youth sold on sports betting, either as a result of some wins or just peer pressure, could develop the illusion that betting and lottery could be solid foundations to raise capital for ventures. That could well be in theory. But the reality suggests otherwise, for betting tends to bait more betting, until the player loses all.

    So, inasmuch as citizens have a right to engage in betting and lottery as legitimate economic activity, the government owes it a duty to publicise the social dangers in such endeavours.

    By the way, betting and lottery is usually the bastion of the poor, on the lookout for some magical deal.  The middle class and the rich, that made their money from less whimsical ventures, know better than to risk their hard-earned money.

    The government therefore, even when not overtly discouraging the business of betting and lottery, has the moral responsibility to warn the people, especially the youth, on its danger. That it should do with public service campaigns and advertisements, now that the activity is thriving.

    But there is a direct correlation between rising betting and lottery, and a dip in the economy. Betting is not new in Nigeria. But it somewhat faded during the oil boom years of artificial prosperity. Now, it is economic recession, and betting is staging a big comeback.

    So, as prevention is better than cure, the ultimate antidote to intolerable level of betting is a better economy where citizens are productively engaged.

    That is an added reason why the Buhari administration should urgently fix the economy. If that is done, betting would not disappear.  But fewer citizens would be tempted to participate, because they have, short of crime, nothing better to engage themselves to make quick money.

  • Recession: Backyard farm to the rescue

    Recession: Backyard farm to the rescue

    More backyard farms are emerging to supplement household nutrition and income. Backyard farming topped discussions at the World Food Day by Gourmet Guide Communications at the University of Lagos at the weekend. DANIEL ESSIET reports.

    Farmers with small backyard spaces are using them to grow vegetables and other crops.

    They cultivate veggies mainly for consumption. One of such farmers is  Kayode Bodunde, a logistics expert.

    He and his wife are operating a small farm within their compound. There’s also a poultry.

    The farm is a collaboration among family members.

    Having enjoyed the benefits of a backyard farm, Bodunde is campaigning to bring such back. The impetus behind this is not so much about reducing grocery costs but championing  a return  to  land and getting back to natural foods.

    At a forum on the World Food Day at the University of Lagos at the weekend,Bodunde said backyard farms would help Nigerians prepare for a future where the economy would make buying vegetables expensive.

    According to him, backyard farms encourage food sufficiency. Aside from the convenience of providing food at one’s doorstep, he said the farms encourage healthier lifestyles and diets. He urged landlords to embrace urban farming.

    Bodunde is involved in a project to instal greenhouse at home and on the farms for those who are interested. In addition, he  said,  there are small greenhouses for those who can’t grow produce outdoors.

    He is happy to see corn cropping  in neighbours’yards, or the small spaces between compound walls and gutters.

    But backyard farming is not new in Nigeria. Years ago, rural areas boasted of a vibrant community of home gardeners who put their terraces and  backyards to good use. It was common to have neighbours growing their own vegetables and collecting eggs from own chickens.

    Many of them translated their passion into business ventures. Egg and poultry meat production depend on backyard farming using indigenous chicken breed. Production is very poor, reflecting low body weight.  But these were life-changing events. However, rural-urban drift has halted this.

    The Chief Executive, Corporate Farmers, Mr Akin Alabi, an accountant and financial consultant, has  taken up farming to improve the  productivity level from backyard  farming. With his capability and enthusiasm, Alabi became one of the progressive farmers in a short time. He operates his farms in Ogun State and played an active role in promoting a food secured environment. He has also been able to employ youths in his farms.

    He is a source of inspiration for  youths in farming.

    Though profitability and labour remain challenges, he does not regret the career switch.

    He noted that though farming may be capital intensive, many people are growing food on small plots.

    According to him, farming appeal had been pretty broad-cutting across professionals in various sectors. The range of operations includes backyard plots, large acre farms and projects designed to provide training for agriculture enterprises.

    His organisation provides material support and expertise to gardeners as well as a programme that helps local farmers sell their produce.

    Alabi, also Chief Executive,  Hayzee Mind Concept, noted that as the average age of farmers continues to rise, there was a need for younger farmers to step in to fill the gaps.

    One of those championing backyard farming is the Chief Executive, farmingbizsetup.com, Mr Lamson Opeyemi.

    A computer graduate, Opeyemi had no background in farming. Today, he is raising mini-livestock. He  runs the business and wants Nigerians to see him as a model backyard farmer.  His campaign is for Nigerians to run mini-livestock farms on  where they live.