2019 Review of Developments In Islamic Finance In Nigeria
As the new year 2020 enters its first full week, a review of developments that shaped Islamic Finance in Nigeria in the year 2019 appears below:
Islamic Finance Global Asset Size
According to the Islamic Financial Industry Stability Report, the current global size of the market is $2.19trn, which attests to a remarkable growth post-2008 financial crisis.
Malaysia Leading Global Hub For Islamic Finance
Malaysia is currently the leading hub for Islamic Finance globally. At the end of 2017, it continued to be the main driver for both Sukuk outstanding and issuance for the year, with a global market share of 51% and 36.2% respectively, according to the Malaysian Reserve Bank report.
Also, Thompson Reuters’ Islamic Finance Development Report 2018 showed that Malaysia remains a leader among 56 countries for Islamic Finance Institutions.
Africa and Nigeria’s Potential Size
Africa’s market size for Islamic Finance as of 2011 was $18bn, while the potential for Nigeria since then is over $17bn. Nigeria and Africa are the new frontiers for the growth of Islamic Finance globally.
SEC Commitment To Developing Nigeria’s Non-Interest Finance Market
The apex regulator of the capital market, the Securities and Exchange Commission (SEC) restated its commitment in 2019 to provide the regulatory framework that will support the growth and development of the non-interest finance market.
The Acting Director-General of SEC, Ms. Mary Uduk, assured the market that it was committed as a regulator to enabling the full implementation of the provisions for a non-interest finance market contained in the 2015 to 2025 capital market masterplan.
NSE Listing Of Second N100bn Sukuk Ijara
The Debt Management Office of Nigeria on July 23rd, 2019, listed the Second N100bn Sukuk Ijarah on The Nigerian Stock Exchange.
The seven-year FGN Sukuk is due to mature in 2025. The Sukuk had a rental rate of 15.743%, a 73-basis point discount from the 16.47% rental rate of the maiden issuance listed in April 2018
The Inaugural NSE Islamic Finance Forum
The Nigeria stock exchange hosted the inaugural Islamic Finance Forum in June 2019, which was an opportunity for stakeholders to explore how the industry can boost liquidity and deepen the capital market.
It had in attendance the Director-General of the Debt Management Office Ms. Pat Oniha, the Divisional Head, Trading Business, Nigeria Stock Exchange and the CEO of Lotus Capital Mrs. Hajara Adeola amongst other personalities.
FMDQ Securities Exchange Support
The FMDQ Securities Exchange also continued its support for the growth of the Islamic Finance market, since the pioneer listing of the FGN Sukuk Bond in 2018.
It continued to engage the Debt Management Office and other key stakeholders on the prospects of further listings of Sukuks in the market, which should see more activities occur in 2020.
NAICOM and Takaful Insurance Companies
In 2019 the National Insurance Commission (NAICOM) licensed two new Takaful Insurance Companies, namely; Cornerstone Takaful Insurance Limited and Salam Takaful Insurance Limited.
The licensing of the new Takaful insurers took the number of Takaful Insurance Companies in Nigeria to 4 with the first two Noor Takaful Insurance and Jaiz Takaful Insurance, operating since 2016.
4th Africa International Conference on Islamic Finance
Nigeria, for the first time, hosted the 4th edition of the Africa International Conference on Islamic Finance, AICIF in Lagos from November 4th to 5th, 2019. The conference focused on the theme “Infrastructure Financing, Sustainability and the Future of African Markets.”
It had as keynote speakers His Royal Highness Muhammad Sanusi II the Emir of Kano and Mr. Oussama Kaissi, the CEO of the Islamic Corporation on Insurance Export Credit, ICIEC.
The event featured panel sessions that discussed how Islamic Finance could support Nigeria and Africa’s economic development, as a veritable source of financing.