How The NSE Promotes Investor Education in Non-Interest Finance - Jude Chiemeka


Monday, December 16, 2019 / 10:00 AM / Bukola Akinyele for Proshare WebTV / Header Image Credit: WebTV


As Nigeria continues to tap into the opportunities that non-interest financing and Sukuk provide, the Nigeria Stock Exchange (NSE) has restated its commitment to driving investor education and capacity building in this area of capital market funding.


Mr. Jude Chiemeka, the Divisional Head, Trading Business of the NSE, disclosed this in an interview with Proshare WebTV's "Islamic Finance Week".


According to the NSE's Trading Business boss, "Sukuk is  one of those innovative ways that the Debt Management Office(DMO)  has raised capital for various infrastructural projects by the federal government".


Chiemeka noted that in the issuance of Sukuk in Nigeria, a lot of collaborative institutional participation had taken place to ensure its effective implementation. So far, the results have been impressive. He reiterated the intention of the NSE to broaden the scope of its investor education and capacity building programmes through the X-Academy, with a focus on increasing participation in the retail end of the market.


Further, Chiemeka said the X-Academy is a trading platform that has focused on building capacity, especially for retail activities.  He pointed out that this was an aspect of the Exchange's investor education agenda that attempts to deepen the knowledge of participants of market instruments such as Sukuk. 


Giving further insight into the issuance of Sukuk in Nigeria, Chiemeka said the 2017 and 2018 Sukuk issued each at N100bn and listed on the NSE, which helped to increase market liquidity equally added to market breadth. 


He said the NSE would continue to scale up its investor education programmes to encourage increased participation of retail investors in Nigeria, in instruments like Sukuk and other medium-term to long-term non-interest financing options.


Chiemeka recalled that the first sub-national Sukuk bond to be issued in the country was from Osun state in 2013 at the value of N11.4bn.


According to him, the Osun state Sukuk was deployed for the education sector and led to the building and completion of quality schools in the state and the development of education in the state.


He stressed that apart from driving market liquidity, Sukuk is well known for its specificity in intent and execution.

The NSE Executive said just like the case of FGN Sukuk issued from 2017 to 2018, the funds financed 26 specific federal road projects that cover the six(6) geo-political zones of the nation.


He added that the structure of the Sukuk is robust and ring-fenced by the Debt Management Office, DMO that ensures the funds go directly to the projects and remains a viable form of alternative financing.


"Looking at the prospects for the global Islamic finance market, which is about $2.1trn and the Sukuks that constitute 24% of it, there is a lot of room for growth in countries like Nigeria," Chiemeka said.


"Nigerian Stock Exchange has organized several training programmes, workshops, and seminars around Sukuk and Islamic finance. We intend to do a lot more in the future on the which should increase investor participation in the market".


He also called on market stakeholders in Nigeria to come up with more innovative instruments that are shariah-compliant, which will make the nation an attractive spot for non-interest finance.


Speaking on the 2020 planned visit of the Islamic Development Bank  President to Nigeria, Mr. Jude Chiemeka harped on constructive conversations that will boost Nigeria's profile as a leading African destination for Islamic finance.

He also called for robust conversations around how to deepen the market and attract more international investors, which will give the DMO and the federal government the ability to issue more Sukuk.

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