The Nigerian Exchange Limited has said that with about 53% of the Muslim population Islamic Finance is Poised for significant growth in Nigeria.
Mr Jude Chiemeka, the Executive Director, Capital Markets, NGX, stated this at a workshop on the issuance of Islamic Finance instruments.
In a bid to further deepen the capital market in Nigeria through the issuance of Islamic Finance instruments, Nigerian Exchange Limited (NGX) and Islamic Development Bank Institute (IsDBI) collaborated on a capacity-building workshop for Issuers and Investors.
The workshop aimed to educate stakeholders on contemporary issues and practices of Islamic finance in different jurisdictions and furnish them with case studies and success stories.
Themed “Economic Growth and Business Development Opportunities Through the Islamic Capital Markets,” participants were able to gain more understanding of how Islamic finance can drive inclusive growth and sustainable business practices in Nigeria.
What Chiemeka said
Mr. Jude Chiemeka, the Executive Director, Capital Markets, NGX, whilst delivering the opening remarks underpinned the potential of Islamic Finance in Nigeria.
Chiemeka said: “With Nigeria having a significant Muslim population of about 53% of the country’s over 200 million population, the long-term potential of Islamic finance in Nigeria is indeed significant.
It has increased access to banking services for underserved Muslim populations, promoted access to finance for small- and medium-sized enterprises (SMEs) through its risk-sharing characteristics, and provided suitable financing options for infrastructure projects through Sukuk, which can spur economic development and attract private sector investment.”
“According to Fitch Ratings, the size of the Nigerian Islamic finance industry is estimated at $2.9 billion at end-2022, with outstanding sukuk being the largest segment at 57%, followed by Islamic banks at 42% (total assets), and the remaining 1% between Islamic funds (total assets) and takaful (total contributions),” he added.
Delivering a presentation on applying Islamic Finance to Nigeria’s economy, Mr Syed Faiq Najeeb, Senior Islamic Finance Specialist, IsDBI said Islamic finance in Nigeria can take the form of partnership and solidarity-based models.
He noted that since Islamic finance is focused on real economic-activity-based financing and investment like infrastructure and real estate financing with strong principles of governance, ethics, and fairness, it portends great opportunities for value creation as players may have fewer competitors.
According to Najeeb, its risk-sharing, profit-sharing, loss-absorbing mechanisms and absence of zero-sum games can help drive sustainable economic growth.
The Head, of Secondary Markets, NGX, Mr Kazeem Alimi expressed confidence in the learning by participants saying that,
“We are optimistic that it will lead to more product issuances in the Islamic finance space especially from corporates.”
