Ex-Presidential candidate, Davies raises alarm over hidden dangers of SUKUK Islamic Bond

On SUKUK Sharia-compliant bond Islamic finance in Nigeria: Religious vs Socio-economic implications:

• We need an explanation on SUKUK Islamic Finance

• What about the question of underline asset?

• Is Nigeria now Sharia compliant?

Ex-Presidential candidate of Mass Action Joint Alliance (MAJA) in the 2019 election, Prof. Funmilayo Adesanya-Davies has reacted to the interview with Ms. Patience Oniha, the Director-General of Debt Management Office (DMO) on the issue of “Indebtedness: We won’t lose national assets to Chinese government, FG assures Nigerians”.

Ms. Patience Oniha, the Director-General of DMO made this known in an interview with newsmen on Saturday in Abuja.

During the interview, Ms. Oniha also urged Nigerians to always endeavour to verify sensitive information from official sources before disseminating it.

In the release, “The Debt Management Office (DMO) has clarified that loans from China to Nigeria, which presently stood at 3.59 billion dollars, constitute only 9.4 per cent of the country’s total foreign debt stock of 37.9 billion dollars.

She also clarified that the loans were largely concessional, as no national asset was tagged as collateral.

The News Agency of Nigeria (NAN) reports that in recent times, both the social and mainstream media have been awash with news about some African countries, including Nigeria, facing the threat of losing some critical national assets to the Asian country due to high levels of indebtedness.

She further stated that “Nigeria’s total debt stock as of Sept. 30 was 37.9 billion dollars, this figure comprised the external debt stock of the Federal Government, 36 state governments and the Federal Capital Territory.

“But total loans from China stands at 3.59 billion dollars, which is 9.47 per cent of the total external debt.

“The loans did not require any national asset as collateral; they were largely concessional,’’ she said.

Ms. Patience Oniha also explained that before foreign loans were contracted, very sensitive steps were taken by multiple institutions of government to ensure that they were beneficial to the nation.

Meanwhile, before any foreign loan is contracted, including the issuance of Eurobond, they are approved by the Federal Executive Council and thereafter, the National Assembly.

Again, an important and extremely critical step is that the loan agreements are approved by the Federal Ministry of Justice.

However, Funmilayo Adesanya-Davies has requested that Ms. Patience Oniha should similarly explain and clarify the case of funds being raised by Nigeria from SUKUK Bond and the terms as it is “Interest-Free-Loan”.

This involves “a direct asset ownership interest” by definition to the best of everyone’s knowledge.”

However, “a Sukuk is a sharia-compliant bond-like instrument that complies with Islamic religious law commonly known as Shari’a used in Islamic finance,” by its definition, while Nigeria is a secular or multi-religious state by our Constitution.

Adesanya-Davies said: “We should be guided by the fact that, “the term “Shari’a refers to a set of Islamic religious law that governs aspects of day-to-day life for Muslims in addition to religious rituals.

“”Shari’a law also provides religious followers with a set of principles and guidelines to help them make important decisions in their lives, such as finances and investments. Islamic banking and finance outline where many can invest and rules about interest.”

“The point being made here is very simple and clear in black and white.

“Don’t you think that the concept of “Interest-Free-Loan” is a subtle economic scheme designed by the Arab Muslim World in Islam to recolonize Black Africa?

“Is the Sukuk Bond not far from being an “Interest-Free-Loan” but a contraption of economic bondage that clandestinely relies on sharing of profits accruing from the associated investment?

“Thus the question is which is better— to pay interest on a given loan and retain your right of ownership of your business venture, OR, to share ownership of a business venture with the Sukuk providers?

“The point being made here again is, that the major indicator of Sukuk Bond seem to be the loss of ownership of one’s property or business outfit to the Sukuk provider.

“To put it again in the undiluted words of Mohd Nazri Bin Chik, Member of the Shari’a Supervisory Council of Amana Bank and Head of Sharia Division of Bank Islam Malaysia Berhad: “Sukuk providers have a right to the ownership of the underlying asset and its cash-flows”.

“Does this sound like an “Interest-Free-Loan”?

“This is the fundamental question every Nigerian and Nigerian leaders need to ask and it should be addressed.

“Now, that the N100 billion raised from SUKUK Bond is being used to fix the roads of the thirty-six (36) states of Nigeria; and we are all watching as they are also infiltrating forcefully and their footmen are encroaching into the entire space of Nigeria gradually to take possession.

“Beyond the matter of loss of ownership and sharing of profit, is the question of Shari’a compliance.

“According to Bin Chik again, “Funds raised [under Sukuk] must be used for Shari’a compliant (Halal) activities”, or as Latham and Watkins put it: “The assets or businesses underlying the Sukuk must be Shari’a compliant…”

“The question here again is, does the introduction of Sukuk Bond into Nigeria’s Federal national budgetary system not the imposition of Sharia economy on Nigeria and thus an action in the process of Fulanization and Islamization by the Arab Muslim World to re-colonize us?

“In practice, Sukuk Bond often involves the underlying principle of Islamic finance, which is not just about borrowing, but on its Neo-colonial precept of “if I provide you a loan to finance a project, I automatically become a joint-owner of that project.

“”It is therefore not just about paying the accruing interest or paying back the loan”.

“Financing any aspect of Nigeria’s budget through the Sukuk Bond would definitely mean allowing for the joint ownership of the asset or project called the “Federal Republic of Nigeria” with the Arab issuing Houses, one recons!”

Speaking further on the inherent dangers of SUKUK, Adesanya-Davies said:

“How can the Federal Government explain this fact in the context of using the proceeds of this financial bond to construct our national roads?

“Does it not translate to joint ownership of our ancestral roads with Saudi Arabia and other Islamic nations?

“Does it not translate to the right of constructing Mosques on any part of the said roads without hindrance?

“Furthermore, is it not another means of re-introducing the failed grazing path policy for the murderous Fulani herdsmen?

“If the Federal Government needs private investors in road construction, must it come by Sukuk Bond?

“These statements are made on behalf of all well meaning Nigerians and leaders of Nigeria, mindful of the provisions of the 1999 Constitution of the Federal Republic of Nigeria.

“Chapter 1, Section1, Sub-section 1 explicitly states: “This Constitution is supreme and its provisions shall have binding force on all authorities and persons throughout the Federal Republic of Nigeria.”

“It is therefore incumbent on those who hold the reins of power in this Federal Republic of Nigeria– a multi-religious and multi-ethnic nation to remain sacrosanct in the application of the above section of the Constitution of the Federal Republic of Nigeria, irrespective of one’s ethnic or religious bias.

“Thus, may I state categorically without mincing words that this was part of our fears and the major reason for our consistent opposition to the Presidency of General Muhammadu Buhari during his electioneering campaign after his declaration on 15th October 2014 and the question of his unquenchable policy of Islamization which we believe he shall pursue with fundamentalist vigour and impunity.

“Nigerians are too intellectually advanced and sophisticated not to always endeavour to verify sensitive information from official sources before disseminating it.\

“As such we ask these questions as regards the SUKUK BOND and it’s terms in Nigeria and demand full explanations please.”

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