Infrastructure Financing through Islamic
Finance in the Islamic Countries
116
billion in 2018, it implies that the budgetary provision for infrastructure financing in 2018 is
USD 3.6 billion (Budget Office 2018).
Public Debt: The government could raise an additional USD 76 billion by sustaining its
current, relatively conservative debt ratio level of around 20% of GDP over the period 2014–
18. This implies that, on a yearly basis, the public debt to be raised would be USD 15.2 billion
(NIIMP 2014).
Other Public Sources (e.g., the Sovereign Wealth Fund (SWF): USD 1.4 billion is available in
2018 from the SWF, and the Fund should subsequently continue to allocate 32.5% of its assets
to infrastructure financing. USD 1 billion could also be sourced from public pension funds in
2018 and subsequently an allocation of 20% of the funds to infrastructure as per 2012
regulation on the investment of funds (NIIMP 2014).
Public Private Partnerships (PPPs): Opportunities also exist for Nigeria to finance its public
infrastructure requirement through PPPs. Nigeria has the potential to mobilize between USD 3
– 5 billion through PPPs in 2018 (NIIMP 2014).
Funding by Multilateral Development Institutions: The African Development Bank had, in
2017, signed over the sum of USD 2.84 billion to Ministries, Departments and Agencies (MDAs)
for infrastructure development across various sectors of the Nigerian economy (ADB Data
Portal). Similarly, the World Bank in 2018 approved USD 486 million to improve the Nigeria
Electricity Transmission Network and Infrastructure over a 5-year period, implying a yearly
infrastructure financing of USD 40.5 million (World Bank 2018).
4.3.4. Legal and Regulatory Framework for Infrastructure Investments
Infrastructure investments are quite huge and beyond the budgetary provisions of
government. In order to encourage both local and foreign private sector involvement, the
government provided an enabling legal and regulatory environment that is conducive for
infrastructure investments. The main laws that encourage infrastructure investment are: The
Infrastructure Concession Regulatory Commission (ICRC) Act (Establishment) Act 2005,
Corrupt Practices and Other Related Offences (CP) Act 2000, Economic and Financial Crimes
Commission (EFCC) (Establishment) Act 2004, Public Procurement (PP) Act 2007, Public
Enterprises (PE) (Privatization and Commercialization) Act 2004, Companies and Allied
Matters Act (CAMA) 1990, Freedom of Information (FOI) Act 2011, and the Fiscal
Responsibility (FR) Act 2007.
The Infrastructure Concession Regulatory Commission (Establishment) Act 2005 is the
principal legislation for the regulation of PPP contracts through Federal Government
Infrastructure. It provides an enabling environment for infrastructure investments by
empowering the relevant agency to make policies, rules and regulations guiding the PPP as
well as taking custody of every concession agreement to ensure its efficient execution by the
Federal Government (ICRC Act 2005). Other supporting laws help to instil greater confidence
in investors by stipulating severe punishment for corrupt practices in transactions and
providing protection to those who disclose information in respect of corrupt practices
committed or likely to be committed by other persons (CP Act 2000). Investors are also
protected from all forms of Financial crimes that may be perpetrated against them (EFFC,
2004). Furthermore, in the event of the bankruptcy and insolvency of a corporate entity, there