SEC Nigeria Restates Commitment to Development of the Non-Interest Capital Market


Wednesday, June 16, 2021 / 02.00 PM / Bukola Akinyele-Yisau for WebTV /Header Image Credit: WebTV


The Securities and Exchange Commission (SEC) has restated its commitment to the growth and development of Nigeria's non-interest Capital Market. Mr. Abdulkadir Abbas the Head, Securities and Investment Services, SEC gave the assurance as keynote speaker at the maiden WebTV Islamic Finance Webinar series.


Representing the Director-General SEC Nigeria, Alhaji Lamido Yuguda, he said part of the mandate of the apex regulator was market development.  According to Abbas the growth of the non-interest capital market in the country has been fueled by the increase in Sukuk bond issuances amidst a growing appetite for the instrument by local investors.


Speaking on the Capital Market Master Plan (2015-2025) developed by SEC Nigeria he said the goal was to achieve a 25% contribution from the non-interest market to the overall market capitalization by 2025. He noted that in 2004, SEC joined the IOSCO joint committee on the Islamic Capital Market in Nigeria which led to the development of several initiatives to deepen the market.


Abbas held that SEC Nigeria was committed to promoting enabling regulations, to make Nigeria the regional hub for non-interest finance on the African continent.


Mr. Tesleem Akosile the Team Lead, Shariah Non-Compliant Risk, TAJ Bank who represented the bank's Managing Director, Mr. Norfadelizan Abdulrahman, said there were enormous opportunities for non-interest banks to collaborate with other stakeholders, to build a vibrant Islamic finance ecosystem.


He said areas like wealth management provide opportunities for developing products for the high-net-worth individuals (HNIs) and other classes of citizens, thereby driving financial inclusion and economic empowerment.


Mrs. Adaeze Uzor-Kalu the Head, External Affairs, FMDQ Group in her presentation said Nigeria was one of the pioneering nations that has established an Islamic Finance Regulatory framework in the West African Region.

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From the debt market perspective, she said the total global Sukuk market had reached $715.2bn in Q1, 2021 which was 3% higher than in Q4, 2020.

In terms of prospects for developing Islamic finance through the Debt Capital Market, she highlighted the following areas that need to be explored;

  • The need for a standardized and robust regulatory framework for Sukuk issuance
  • The need for government and regulatory incentives to drive participation in the Islamic Finance sector
  • The need for heightened awareness on Islamic Finance and build capacity in key institutions
  • The need for increased primary markets issuances of Sukuks and Islamic commercial papers
  • Enhancing liquidity through a two-way quote system


In his presentation, the CEO of Marble Capital, Mr. Akeem Oyewale, outlined the various segments that non-interest finance products could be developed and adopted such as Sukuk, Commodities, Unit Trusts, Derivatives, Equities, Mutual Funds, and Traded Funds.


Oyewale also described the Lotus Index as an enabler for investors seeking Halal-compliant stocks in the capital market.


The Vice President, Financial Markets, AFEX Nigeria, Mrs. Oluwafunto Oluwasemo, identified trade finance, inventory/working capital finance, commodity trading, and production finance as aspects in the commodities market that Islamic Finance can support.


She pointed to other investment opportunities for Islamic finance such as Sharia Asset-Backed Commodities Products (ABCP), Exchange Traded Commodities (ETC), Input finance, and Spot contracts.


In the area of investment through Islamic finance products and Index, Mr. Ndako Mujindadi, Head, Investment and Research, Lotus Capital informed participants that the total market cap of Shariah-compliant stocks stood at roughly N11.3trn.


Concerning benefits that could be derived from Islamic finance instruments, Mujindadi believed sectors like Real Estate and Healthcare could be funded by non-interest Islamic finance assets.


The 3 hour event was moderated by Dr. Muhammad Ishaq Akinlaso of TAJ Bank while Mrs. Bukola Akinyele-Yisau the anchor of WebTV Islamic Finance Weekly was the host.

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