Nigeria’s Non-Interest Market Capital (NIMC) Reaches $2.9 Billion, Says SEC Director-General

• Nigeria’s Non-Interest Market Capital (NIMC) grows to $2.9 billion in 2022, representing 0.9% of the global non-interest market
• SEC Director-General highlights the transformative growth of NIMC and emphasizes Sukuk’s potential in infrastructure financing

Lamido Yuguda, the Director-General of the Security and Exchange Commission (SEC), revealed that Nigeria’s Non-Interest Market Capital (NIMC) grew to $2.9 billion in 2022. At the First International Financial Services Board IFSB-SECN International Forum on Non-Interest Capital Markets in Abuja, Yuguda emphasized that this figure represents 0.9% of the global non-interest market, which is at $3.2 trillion. He stressed the need for further growth in the sector, considering Nigeria’s large population, with a significant portion remaining unbanked.

Yuguda outlined the composition of the non-interest financing market, with outstanding sukuk accounting for 57%, followed by Islamic banks at 42% (total assets), and the remaining 1% split between Islamic funds (total assets) and Takaful (total contributions). He highlighted the transformative growth of the Non-Interest (Islamic) Capital Market in Nigeria, contributing to the diversity of the financial markets in line with the revised capital market master plan for 2021-2025.

The SEC Director-General pointed out the potential of sukuk in infrastructure financing, noting that since its debut in 2017, the Debt Management Office has raised nearly N1 trillion to fund critical road and bridge projects. He encouraged the exploration of sukuk as an attractive capital market instrument for both corporate and government entities.

Yuguda identified challenges that need addressing for Nigeria to join the league of global Islamic finance jurisdictions. These challenges include inadequate awareness, regulatory harmonization, and legislation enacting legal certainty and clarity within the Islamic financial framework.

Dr. Bello Lawal Danbatta, the Secretary-General of IFSB, emphasized the potential of NIMC to address Nigeria’s economic challenges, citing successful examples in countries like Malaysia and Indonesia. The Minister of Finance, Wale Edun, stated that Nigeria is seeking non-debt investments, particularly those aligned with green initiatives.