Why the FG is increasing its stake in the Islamic Development Bank

Nairametrics| Nigeria has decided to reinvest its dividends from the Islamic Development Bank (IDB) for the year 2016. This was disclosed in a statement by the Ministry of Finance. Here are key points from the statement:

• The dividends which earned during the bank’s 2015/2016 financial year are $296413.
• Nigeria is the 4th largest holder after Saudi Arabia, Libya and ran with 7.66%
• Public financial institutions will receive dividends amounting to $1.65 million
• The government is also discussing with the bank regarding partnership on the 2nd Niger Bridge

Loans by multi lateral institutions like the IDB are based on the proportion of ownership held.   So the higher the proportion, the bigger the amount of assistance a nation can get. The government may have decided to reinvest the dividends due to its relatively small amount.

The Islamic Development Bank (IDB) was founded in 1973 at the meeting of finance ministers of nations belonging to the Organisation of Islamic Countries (OIC). Operations of the bank began in 1975. There are 56 share holding states. Prominent projects involving the IDB include the Gao bridge in Mali and reconstruction of the Kharnac dam in Azerbaijan. The bank also has a scholarship programme.

The first Niger bridge was constructed by Dumez between 1964-1965 at an estimated cost of £5 million. Preliminary work on the 2nd Niger bridge was initiated by President Goodluck Jonathan, while a N14.4 billion contract for the bridge was awarded to Julius Berger in January this year.