Business
Nigeria’s Islamic financing worth $2.9bn – Yuguda
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The Director-General of the Security and Exchange Commission (SEC), Lamido Yuguda, says the Non-Interest Market Capital (NIMC) in Nigeria rose to $2.9bn in 2022.
He spoke yesterday in Abuja at the First International Financial Services Board IFSB-SECN International Forum on Non-Interest Capital Markets.
According to Yuguda, with that figure, Nigeria now controls just 0.9 per cent of the $3.2tr global non-interest market, stating that there is a dire need for more growth in the sector as the country has a large population with a significant proportion unbanked.
While stating that the long-term potential for Islamic finance in Nigeria is immense, he said outstanding sukuk forms the largest part of the non-interest financing at 57 per cent, followed by Islamic banks at 42 per cent (total assets), and the remaining one per cent split between Islamic funds (total assets) and Takaful (total contributions).
“The Non-Interest (Islamic) Capital Market in Nigeria has undergone transformative growth, becoming an integral part of our financial framework, offering a distinctive platform for ethical and Shari’ah-compliant investments.
The NICM contributes to the diversity of our financial markets in line with our revised capital market master plan 2021 -2025.”
He said since the debut of Sukuk in 2017, the Debt Management Office has raised almost N1tr to finance over 5,000 kilometres of critical roads and bridges with all such issues oversubscribed.
“Therefore, Sukuks are a good structure for infrastructure financing, as they clear the issuer’s balance sheet of debt, given that the investors own the assets to be financed and share in the gains from such assets. This is really an attractive capital market instrument to be explored by both corporates and governments at all levels.”
He added that Nigeria has the potential to join the league of global Islamic finance jurisdictions “if we could address issues, such as inadequate awareness, regulatory harmonization, and enactment of legislations that enhance legal certainty and clarity similar to what prevails within the conventional financial architecture.”
On his part, the secretary-general of IFSB, Dr Bello Lawal Danbatta, said NIMC has the potential to resolve Nigeria’s economic challenges.
He said countries like Malaysia, and Indonesia, among others have used it to develop different sectors of their economy and that can be replicated in Nigeria.
The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, said the country is seeking non-debt investment that is green.