Infrastructure Financing through Islamic
Finance in the Islamic Countries
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are fair resolution proceedings stipulated in the laws (CAMA 1990). The availability of
information on public entities is paramount for investment decisions, and, to ensure that
investors are adequately informed about any public entity, the FOI Act 2011 ensures that
public records and information are freely available. Rascality of Government in terms of
expenditure can also have a significant impact on investors’ decisions, and, in order to give
some level of assurance to the investors, the FR Act 2007 ensures that the government spends
responsibly.
The relevant laws in the transportation Sector that encourage infrastructure investments are
the Federal Highways Act, National Railway Corporation Act, Nigerian Civil Aviation Authority
Act, Nigerian Ports Authority Act, and the Nigerian Inland Water Ways Act. These laws are in
consonance with the Constitution of Nigeria and are generally flexible by encouraging sub-
national participation. However, some of the laws present some challenges that are not
investor friendly (NIIMP 2014).
The Power sub-sector has Electric Power Sector Reform Act 2004 as its enabling law. (NIIMP
2014). The Housing Sector has four key legislations that facilitate infrastructure investments.
These are: the Land Use Act, the Federal Housing Act, the National Housing Fund Act and the
Mortgage Institutions Act. The Land Use Act has some bureaucratic bottlenecks that
discourage private sector investments. Similarly, the Federal Housing Act has some provisions
that may create conflict between the State and Federal governments as to the choice and
location of housing projects, thereby discouraging private sector participation (NIIMP 2014).
4.3.4.1. Public Procurement Regime
Public Procurement (PP) Act 2007 defines the procedures for the procurement of
infrastructure projects in the country. The Act assures investors with policies and practices on
public procurement which promote probity, accountability and transparency in the
procurement process. Investors will also be assured of managing the privatized entities
because such entities will be managed by strategic investors from the effective date of the
privatization on such terms and conditions as may be agreed upon (PE Act 2004). The status
of the different stages of the procurement regime identified by World Bank (discussed in
Chapter 2) for Nigeria is shown in Chart 4.4. While the preparation stage of procurement for
Nigeria is the weakest, scoring only 27, the procurement process itself is ranked high with a
score of 71. The score for the contract management part (53) is relatively better than the Sub-
Saharan region low-income and lower-middle income groups. Compared to OIC members,
Nigeria has a lower score for the preparation stage but higher scores for the procurement and
contract management stages.