L – R shows Jude Chiemeka, Divisional Head, Trading Business, The Nigerian Stock Exchange (NSE); Patience Oniha, Director General, Debt Management Office; Hajara Adeola, Managing Director/CEO, Lotus Capital and Andrew Morgan, Managing Director/CEO, REDmoney during the Inaugural Islamic Finance News (IFN) Nigeria Forum at the Eko Hotel today in Lagos.
The Nigerian Stock Exchange (NSE) has called for the development of a viable Islamic economy in Nigeria, saying it would attract more foreign inflows of low-cost funds for development.
Addressing an inaugural forum of Islamic Finance Network (IFN) Nigeria in Lagos on Tuesday, NSE Divisional Head, Trading Business, Mr. Jude Chiemeka, urged investment managers seeking to achieve portfolio diversification to explore Islamic Finance instruments, saying the sector presents opportunities to unlock dormant pools of capital within the nation.
“The development of a viable Islamic economy in Nigeria has far-reaching implications within global markets, for investment managers seeking to achieve portfolio diversification.
“The ability for fund managers seeking Shari’ah-compliant investment products to diversify into our markets facilitates more foreign inflows which has implications for the economy via the attraction of low-cost funds for development,” said the Chiemeka who represented NSE CEO at the event.
He said the Islamic finance sector has a pool of $2trillion as at end of 2018, up from $1.5trillion in 2016, pointing out such funds could be accessed for infrastructure financing using Islamic financing instruments such as Sukkuk bonds issuances and others.
He said although this growth largely concentrated within GCC region and in Asia driven by growth in Islamic banking assets and Sukkuk issuances, recent data indicated that Islamic financing is beginning to take roots in Africa, with issuers across the Gambia, Sudan, Senegal, Ivory Coast, Togo, as well as Nigeria taking advantage of the funding instrument in more recent times.
Citing issuance of two N100bn tranches of Federal Government of Nigeria Sukkuk bond in 2016 as well as the 2013 Osun State Government’s N11.4bn, 7-year Sukkuk bond used to finance the construction and rehabilitation of 27 schools in the state, Chiemeka said that the sector presents numerous opportunities for enhancing the economic fortunes of this country, particularly in the areas of infrastructure financing.
“These Sukkuk instruments (FGN’s two N100bn tranches of Sukkuk bond) were used to finance the maintenance and construction of critical road infrastructure across the six geopolitical zones of the country. These instruments were a huge success and widely accepted by the capital market community in Nigeria. Clearly, Islamic Finance represents a turning point and a new paradigm for the financing of infrastructure in this country,” Chiemeka stated.
He, therefore, applauded the federal government, the Debt Management Office, the Securities and Exchange Commission, the National Pension Commission and all international partners for commitment to the deepening and growth of Islamic Finance in Nigeria.
“We promise to continue our collaboration with all market stakeholders, to collectively contribute towards the enhancement of this new asset class, and ultimately towards the growth Islamic Finance in Nigeria and Africa at large,” Chiemeka stated.
For its non-interest feature, the federal government and its financial market institutions have been canvassing support for the development of Islamic Financing instrument which also prohibits investing in non-Shari’ah-compliant investment products.
Present at the forum were the Director-General of the Debt Management Office, the Acting Director-General of the Securities and Exchange Commission, the Acting Director-General of the National Pension Commission, and some members of the Capital Market Community.
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