The Securities and Exchange Commission (SEC) has initiated moves to position Nigeria for a big role in the emerging global market for Islamic or non- interest finance valued at over $2 trillion.
Director General of SEC, Mounir Gwarzo, said this in Sokoto at a regional roundtable on Non-Interest Capital Market. He said: “In Nigeria, the SEC has implemented a number of reforms aimed at deepening the non-interest capital market. The global Sukuk market continues to witness remarkable growth since after the 2008 global financial crisis. Annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014.”
SEC has issued regulatory framework, reviewing the rules and introducing new ones on Islamic Fund Management and on Sukuk issuance.
The legal frameworks have encouraged Islamic product innovation with the registration of five ethical/shariah compliant funds and the issuance of Nigeria’s first ever sub-national Ijara Sukuk by the Osun State government in 2013 which was oversubscribed.
“We are also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications,” Gwarzo said.
Investors worldwide are increasingly allocating their resources into Islamic finance products. Hong Kong, with only about 270,000 Muslims, raised $2 billion from Sukuk sales in 2014 and 2015, which attracted $6.7 billion in total orders, while Indonesia plans to tap investors for the sixth year running and Malaysia is returning for its seventh offering this year.
Last year was widely considered a landmark year for Islamic finance, especially with landmark debut Sukuk issuances by countries such as the UK, Hong Kong, Senegal, South Africa, and Luxemburg.
Sukuk is part of Nigeria’s strategic framework through 2017, the Debt Management Office (DMO) said recently