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Understanding The 4TH FGN Forward-Ijarah Sukuk And Its Rental Payment Schedule

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By
Bello Sani Yahuza
Bayero University, Kano
December 31, 2021

Recently on December 16, 2021, The Federal Government of Nigeria issues its fourth Sukuk. The forward-Ijrarah Sukuk is worth N250billion with 10-year tenor at 12.8% rental payment payable half yearly installments. The FGN Sukuk attract a massive subscription of over N865 billion which is oversubscribed by 346%. Following the conclusion of the offering week, the Sukuk was repriced at 13% increasing 0.2% return for investors.

As it is, the Sukuk was structured based on the contract of Ijara or Shari’ah compliant lease.

As per the terms and conditions of Ijarah contract, an asset may be leased to a person named lessee by the owner of the asset named lessor. The lessee is entitled to use the asset within the period of leasing contract and pay in return rental payment for his use of the asset named usufruct. In legal terms, ijarah is a contract of selling beneficial ownership of an asset, hence the lessee is considered a beneficial owner of the asset throughout the leasing period.

Former SDP Presidential Aspirant Dr.Ibrahim Datti Ahmad Is Dead
According to Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Shari’ah Standards No. 17, Forward-Ijarah Sukuk is define as Certificates of ownership of usufructs of described future assets of equal value issued for the purpose of leasing out tangible future assets and for collecting the rental from the subscription revenue so that the usufruct of the described future asset passes into the ownership of the holders of the certificates. In the FGN Sukuk the Sukuk holders own the usufruct of highways, which they rented them to the FGN. The issuer of these certificates is the seller of usufruct of an asset to be made available in the future as per specification. The subscribers are buyers of the usufruct, the funds mobilized through subscription are the purchase price of the usufruct. The certificate holders become joint owners of the undivided usufruct sharing its benefits and risks.

Sukuk is generally a financial instrument used for raising funds for financing budget deficit, infrastructural project for public sector; or enhancing liquidity or increasing capital adequacy for financial institutions and so on; and or for investment opportunity for individuals and corporate entities. For the same reason, the FGN venture into Sukuk market to raise fund nd issue Forward-lease Ijarah Sukuk to the public. Regarding this, dual requirements are needed for this ijarah sukuk, the guiding Shari’ah principles of a valid ijarah contract on one hand, and the Nigerian financial system laws (legal, regulatory and prudential guidelines) on another. Therefore, two components are essential in understanding this FGN sukuk. The first is the capital raised (N250billion) which is used by the issuer to buy the asset (the highways) and leased it to FGN through Federal Ministry of Works and Housing. In the agreement, the FGN sell the asset to the investors (Sukuk holders) and collect their money to reconstruct the highways with irrevocable condition of taking it as lease upon which the FGN will pay the whole funds invested with their return on installments.

The second component, is the return of the investors’ fund agreed at 13% of the capital which stands at N32.5billion. Now, the FGN through CBN as paying agent will complete payment at end of the 10-year tenor of the Sukuk life the total N282.5billion to the sukuk holders to settle the principal and return as well. The AAOIFI Shari’ah Standard provides that, the lease rental may be in cash or in kind (goods) or benefit (service). It must be specified, either as a lump sum covering the duration of the Ijarah contract, or by instalments for parts of the duration. It may also be for a fixed or variable amount, according to whatever designated method the two parties agree upon. This return is termed according to Shariah principles as profit for a valid contract. In this case, the ijarah or any other contract, there is no issue of violating or non-compliance in setting out terms of paying rental return at any given percentage.

Meanwhile, in all our transactions, whether we calculate them on percentages or not, are just the profits we earn together with the principal sum the total of the capital we have in a business venture. Thus, the percentages according Shari’ah rules, are just means/instrument (wasilahi) for counting and calculations no more no less. It helps in knowing clearly what is the amount one owns or owed in a given transaction. And in the spirit of proper record keeping in line with the Qur’anic guidance. Which enjoins writing down in clear terms whatever is there in a transact such as this one. (Qur’an 2: 282). Percentage in such cases clarifies monetary rights and claims better.

The fact that the conventional system always use percentages for their interest rates computation of returns, does not make counting percentage on our business transactions, agency agreement or partnership contracts invalid from Shari’ah view point.
I conclude by this noble Hadith in which The Prophet Peace Be Upon Him says:
“المسلمون على شروطهم الا شرطا أحل حراما، أو حرم حلالا”
“Muslims are freely bound by their conditions and stipulations, except, a condition permitting prohibited, or prohibiting permitted act”. reported by Abu Dawud, Tirmudhy, Ibn Majah and others.

 

BELLO SANI YAHUZA, currently a PhD candidate in the International Islamic University, Malaysia (IIUM) working on Sharī’ah and application of Maqāṣid-Based Green Sukuk financing for agricultural Development and achieving sustainable food security as his main area of research. He works with Bayero University, Kano Nigeria as an academic lecturer since 2012 in the Department of Islamic Studies & Sharī’ah and The International Institute of Banking & Finance (IIIBF) where he acquired both his B. A. Islamic Studies & M. Sc. Islamic Banking & Finance in 2010 and 2015 respectively. He thought many courses at both degree and master’s levels as well as professional training. He is a Certified Halal Executive (CHEX) by International Halal Research and Training Malaysia (INHART). He attended various international and local conferences and presented many papers therein. Other areas of interest are Islamic Jurisprudence and commercial transaction. ORCID ID: https://orcid.org/0000-0002-8155-7104 Email: bsyahuza.iiibf@buk.edu.ng +2348034431772 University/Organization: International Islamic University Malaysia (IIUM).

Features

Tribute To Late Justice Ahmad Belgore

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By AbdurRaheem Sa’ad Dembo

Death is an inevitable
visitor. When it strikes its victims it’s usually the end of an era. It was in the morning of Eid-l-Fitri, which was 10th April, 2024 I read the news of the demise of Justice Ahmad Olanrewaju Belgore, who died the previous night. He was a star in the judiciary because of his piety, consistency and fairness.

Many prominent Nigerians have sent their condolences to his family, Ilorin Emirate and Nigeria judiciary. One significant thing about late Justice was the fact that his life as a judge was filled with face of humanity.

Emir of Ilorin Alhaji (Dr) Ibrahim Sulu-Gambari and Chairman of Kwara State Traditional Rulers Council in his condolence message described the demise of Justice Belgore as a big loss to the Ilorin Emirate and the Nation at large.

According to the Emir “Belgore was one of the finest justices that the Ilorin Emirate had ever produced, who contributed in no small measures to the growth and development of the judiciary in particular and humanity in general.He prayed that Almighty Allah accept his good deeds, forgive his shortcomings and admit
him into aljannah firdaus.

The Turaki of Ilorin Emirate, Senator Saliu Mustapha has also expressed grief over the death of the legal luminary, described him as a renowned jurist who lived and served the country with his knowledge of the law as an examplary member of the bench.

Senator Mustapha while commiserating with the Nigerian Bar Association on the death of Justice Ahmad Belgore noted that the late jurist contributed immensely to the development of his community and the state in general. Recalling his years of service in the judiciary where he worked with utmost dedication and bowed out in glory last year.

The Senate Committee Chairman on Agric production and Services condoled the Belgore family, The Emir of Ilorin, Ilorin Emirate Descendants Progressive Union, the people of Balogun Fulani Constituency, Associates and friends of the deceased over the demise of illustrious son of the Ilorin Emirate.He prayed Allah to overlook Justice Belgore misdeeds and grant him eternal rest.

Meanwhile, Kwara state Governor,AbdulRahman AbdulRazaq equally expressed sadness over the death of Justice Belgore who passed on Tuesday night.The Governor sent his heartfelt condolences to the entire Ilorin Emirate, and to the Belgores who have lost a rare gem.His Excellency prayed to Allah to forgive justice Belgore of his shortcomings, and admit him to aljannah firdaus.

The Nigerian Bar Association,The Lagos Lawyers and other prominent Nigerians have also mourned the late Ilorin born jurist, but mentioning all of them may not be necessary.

It is imperative to say that late Justice Ahmad Belgore was an incorruptible judge as he retired meritoriously last year.This was aptly captured by the words of Shehu Bashir,Esq “Justice Ahmad Belgore was a jurist with decency of conscience.He journeyed the delicate profession of adjudication with distinction and came out unblemished.

He was an incredibly tolerant, calm, generous, religious and extremely patient man.His propensity to generosity would almost make you think he had more than he was giving,yet he was undoubtedly incorruptible. And he would never make public his generosity to a third party.He was such a responsible gentleman.”

According to a retired judiciary staff who craved for anonymity, disclosed that in 2015 when his benefit has not been paid,he reached out to late Justice Ahmad Belgore and he gave him 120,000 naira as at that time.

Significantly,the late Justice has been described by many as an embodiment of humility, generosity and accessibility. In the words of Pharm Munirat Bello “He was a great icon of peace and beacon of hope to the less privileged, reliably a dependable pillar of support. His act of kindness could be likened to the scent of the natural musk, very calming yet so impactful. No life hardly gets in contact with him and fail to progress. He was gifted with a divine heart of generosity. An upright jurist to the core, an impeccable symbol of Islam. I have never for once seen him angry to the point of passing derogatory words, he could be stern but in a loving way”

Sheikh Saidu Ibrahim Maimasa is a close associate of late Justice Ahmad Belgore and he is also the Public Relations Officer of Markaz, recounted how helpful he was to him and other friends.He said describing his magnanimity and generosity would be inexhaustible.

He cited a case of a person whose house was forcefully taken and he approached Late Justice for possible redress at the Court of law.He explained that the justice told the man not to go to court, because there was no point going to court and win, and thereafter he lost his life.He later ensured that another house was erected for the man from his personal purse.

Furthermore,A family source disclosed that anything that has to do with Belgore’s family, the late Justice Ahmad Belgore was always at the forefront.Meaning he had imbibed the sunnah of Prophet Muhammad (SAW) in uniting the family.

In unraveling his unwavering support for the less privileged, a young man was said to have gone to his GRA residence and appealed to him that he wanted to go to school but he had no sponsor.The late Justice embraced him and sponsored his education throughout.

Parts of the traits of great men are humility and accessibility. If you are the type that cannot render help to people until an influential person in the society recommends them, then you may be far from circle of great men.Your door should be open for help , that is when you would be able to identify those whole truly need succour .

Justice Ahmad Belgore was never a religious bigot,According to Sheikh Saidu Ibrahim Maimasa “He had an open door policy, because he was very accessible.His security orderly was a Christian from Oyo State and he did not only sponsored his wedding but he was also there in person.He did not discriminate”

He was born on April 18,1953, Belgore studied Law at the prestigious Ahmadu Bello university (ABU),Zaria, where he bagged LL.B (Hons.) with specialisation in Islamic Law 1975 to 1978.He attended the Nigerian Law School, Victoria Island,Lagos between 1978/1979 session.

He was the presiding Justice of the Ilorin Division of the Court of Appeal before his retirement in April,2023.He was also former Chief Justice of the Gambia.Justice Ahmad was younger brother to former Chief Justice of Nigeria (CJN) Alfa Belgore.

There is no doubt about the fact that late Justice Ahmad Belgore had lived a life worthy of emulation.He was a regular reciter of holy Quran and a great scholar in his own class.He was the president of Darul-Uloom Alumni Association.

Perfection, they say, belongs to God. I pray Allah forgive his shortcomings and grant him aljannah firdaus.

abdurraheemsaaddembo@gmail.com

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A Tribute to Barrister Sulaiman Ahmed Assayouty

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Late Barrister Suleiman Ahmad Assayouty

 

By AbdurRaheem Sa’ad Dembo

Death is a reminder that this world is fleeting and interim. It has yet corroborated the assertion that we are strangers on this planet called, earth just as Barrister Assayouty has left us unannounced through the inevitable shackles of death

I was shocked because he was a brother that I knew very well as an undergraduate in Bayero University, Kano.He wasn’t a regular student as he was preoccupied with hustling in photography business.He usually stationed at the old site of Bayero University Kano where he carried out his business activities

I was at the new site and we had our regular photographer in person of Hope Photo there but whenever we were at the old site we patronised him.In fact his business point was a regular station for Ilorin Emirate students and other customers whenever they did not have lectures.

Since I left the University I have not heard or seeing him until the day he graduated from Law School and the same was posted on the BUK Alumni WhatsApp Group, Ilorin Emirate chapter.I knew within me that day that he struggled to attain the feat and I rejoiced with him through my comments.

We were all in BUK but Assayouty was an hustler and we patronized him not just because he was one of us but he’s very humble. He had a dream and he pursued it with tenacity, hardwork and prayers so he became a certified lawyer eventually. I was not even aware that he later had a Sayuti Cafe on campus,i got to know through BUK Chat zone on Facebook; an online medium for BUK students and others. I’m sure it was after we have left the school he operated the cafe business

From the Account of my friends and brothers that are resident in Kano, they said he was going to a Police Station in Tofa with his wife and his child yesterday 8th April,2024 before they had an accident that claimed his life and injured his wife and his child who are still in the hospital. I pray to Allah for their speedy recovery.

When a promising young man died it is usually tremendously painful because a dream has been shattered and retrogressed.The demise of Assayouty was one too many as it reinvigorated and rejuvenated the futility of this world.He laboured so hard to become a lawyer. He was studying Law in pari passu with hustling. How great would it have been if He had lived long to enjoy the fruit of his struggle?

According to Mallam Zakariya Bayero “we were staying in an uncompleted building together in 1998, he was running a diploma programme then”.

Barrister Yakubu Abdullahi reacted to my Facebook post about his demise thus “May Allah admit him to Jannat, his death is shocking, I know him as a struggling lawyer, despite his commitment to law practice,he has other struggles he did around Janguza axis. May Allah forgive his shortcomings”.

In Quran 62 Verse 8, Allah says “Say, indeed, the death from which you flee.Indeed it will meet you”. Today it has met our brother but our solace is that Barrister Sulaiman Assayouty died as a Muslim in the holy month of Ramadan, he never tarnished the image of his family and lived a dignified life.May Allah grant him aljannah firdaus and give his immediate family, the Ilorin Emirate BUK Alumni and friends the fortitude to bear the huge loss.

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Kano Water Scarcity: How Long is Governor Abba’s ‘State of Emergency’?

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_By Misbahu El-Hamza_

Kano State makes headlines almost every year, and coincidentally, during Ramadan for water scarcity. The frequent headlines are often attributed to electricity system failures, which disrupt water pumping, or equipment faults at water treatment plants, exacerbating the situation.

About ten months ago, upon taking office, Kano State Governor Alhaji Abba Kabir Yusuf declared a State of Emergency to address water scarcity across the state, urging for patience and maximum cooperation from residents. Although I haven’t seen or reviewed the governor’s plan during this emergency, I recall that resolving Kano’s water issues was one of his campaign promises.

I remember when the governor inspected the Challawa Water Treatment Plant in May 2023 and expressed dissatisfaction with its condition. It was said that only two of the six pumping machines of the facility were functioning at the time.

Following that, the governor give a one-week ultimatum to the Kano State Water Board to submit its demands in order to end the water shortage in the state. There was a sigh of relief by the public. Personally, I had hoped that we’re finally getting over this hardship.

Unfortunately, nearly a year now, the situation is not only prevalent in urban areas but is even worse in rural communities. We are not only seeing those trending headlines of water scarcity in Kano, we’re experiencing the brunt of it.

Recently, the price of a 25-liter jerrican of borehole water in Kano surged by ₦50 to ₦150. Someone told me that he bought one at ₦200 around Kurmi market. In areas like Hotoro, Nassarawa LGA, where I reside near Kumbotso LGA housing the Challawa water plant, prices rose from ₦40 to ₦70 or higher. The Chalawa water plant is believed to have the capacity of supply the whole of Kano with water, but we rely heavily on individual boreholes for water, with little to no infrastructure connecting us to the water plant.

While I resides in a suburb and can afford buying a jerrican of what seems to be clean water, in the rural areas where I often visit for work, the situation is dire. Many communities lack access to clean water sources, with broken or dried-up boreholes and wells being common. Residents, including young children, often resort to fetching water from stagnant ponds shared with cows, donkeys, camels, and even dogs. This water is what they use for all daily activities, posing serious health risks. It’s evident that both state and local governments have neglected these communities, offering little to no solutions for their water woes. Where you see boreholes or wells in these communities, they are either constructed by individual donors or (charity) organizations and a handful ones by politicians.

Governor Alhaji Abba Kabir Yusuf must be aware of the current water crisis in both rural and urban Kano. However, the pressing question remains: how long will his State of Emergency address the suffering caused by the persistent water scarcity or total lack of it across the state?

Three days ago, I heard a jingle apologizing for the water scarcity in Kano metropolitant, blaming the repair works at Challawa and Tamburawa treatment plants. It’s said to have been sponsored by Kano State Water Board. To me, the jingle suggests the governor partly fulfilled his pledge, now it’s the board’s turn to restore water supply. Or at least that’s my assumption.

I know this isn’t the first time the the board apologises. In 2022, the then Managing Director of the board was quoted apologizing to Kano residents for failing to supply water during Ramadan. At that time, 25-liters jerrican of borehole water cost between ₦30 – ₦100.

I remain hopeful that before his remaining three years expire, Alhaji Abba Kabir Yusuf will emerge as Kano’s hero by addressing the water scarcity issue, providing relief to the growing population, including those in rural areas.

As the governor continues to address our water problem within this emergency period, I hope the demands the water board submitted to him as requested include: establishing new plants and resaviors or enhancing existing ones, extending mainline pipes to suburbs and rural areas, ensuring independent power supply for the plants, and securing permanent employment for existing and additional staff. If the board manages its expenses independently, perhaps shifting it to the state payroll would improve also efficiency.

With reliable service and effective system in place, the board and the state government should be rest assured that Kano people will be more willing to pay for water, and the board does not need to heavily depend for its revenue from the industries it diverts our little water to.

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