The Securities and Exchange Commission (SEC) has reaffirmed its goal of achieving 50 listings of Shari’ah-compliant products with a combined market capitalization of approximately N5 trillion by 2025.
Mr. Lamido Yuguda, the Director-General of the SEC, was represented by Mr. Dayo Obisan, the Executive Commissioner of Operations, at a capacity-building workshop held in Abuja for local Shariah talent specializing in the non-interest capital market – level II.
SEC target for non-interest products
During the event, he highlighted that the non-interest capital market (NICM) segment of the revised Capital Market Masterplan (2021 – 2025) aims to achieve 100 retail Shariah-compliant products and attract over one million direct investors in such products.
Mr. Yuguda emphasized the commission’s commitment to achieving these ambitious targets, with a particular focus on capacity building.
This involves nurturing reputable professionals capable of applying Sharia best practices to facilitate the sound implementation of Sharia-compliant initiatives, ultimately aiming to enhance the NICM space.
The DG stated that the commission would continue to leverage its subsidiary, the Nigerian Capital Market Institute, especially in developing robust programs around Non-Interest Finance which are expected to promote capacity-building and sharia-compliant products and processes.
Difference between conventional finance and non-interest finance
He underscored the fundamental difference between conventional finance and Non-Interest Finance, which is the application of Shariah principles in the latter.
Mr. Yuguda stated,
- “As you are all aware, the fundamental difference between conventional finance and Non-Interest Finance is the application of Shariah principles in the latter.”
- “This simply means that NICM cannot exist without experts in Islamic commercial jurisprudence (Fiqhul Mu’amalat Al-Maliyya).”
- “The objective of this Workshop, therefore, is fast-tracking the development of experts for the Market. We believe this will enhance the development of our local Sharia talent, not only for the Nigerian Capital Market but also for the Nigerian Financial system in general.”
Strong public appetite for NICM products
Mr. Yuguda highlighted the strong investor appetite for NICM products, as evidenced by the oversubscription of the FGN and corporate Sukuk issued in previous years. He also provided insights into the workshop’s structure and objectives.
- “As we dive into Level II, the remaining modules relating to Shariah Contracts will be extensively discussed starting today, while modules on Shariah Issues Relating to Non-Interest Capital Market Principles, and Operation of the Sukuk and Equity Markets shall be treated in the coming days.”
He reiterated that Level II aims to consolidate participants’ understanding of the theoretical and practical aspects of the NICM.
- “Armed with this training and subsequent ones to come, the participants would undoubtedly have the potential to provide Shariah advisory services for the Islamic Finance Industry, particularly the Non-Interest Capital Market’s operations as it relates to Shariah principles and rulings,” he added.
Mr. Yuguda highlighted the significant progress made in this area, as reflected in Nigeria’s 13th-place ranking on the Global Islamic Finance Development Indicator 2022, surpassing countries like Bangladesh and Turkey.
He also emphasized the gradual growth of the Non-Interest Finance Sector, which has evolved into a distinct industry within the broader financial landscape, offering alternatives to traditional interest-based financial systems.
