Total assets under management in the global Islamic finance industry had surpassed $2 trillion (N394 trillion) by the end of 2014 this is even as the global sukuk market continues to witness remarkable growth since after the 2008 global financial crisis as Annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014.
This was disclosed by Director-General, Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, at the second Regional Roundtable on Non-Interest Capital Market in Sokoto, Monday
Gwarzo said that the focus of the roundtable was on “Sukuk’’ – one of the most important components of the Islamic financial system saying that While most people identify capital markets as an important source of medium-to-long term capital, few realise the amazing potential of capital markets to serve as a catalyst for financial inclusion.
“SEC is determined to unlock this potential of the Nigerian Capital Market. In particular, we are aware of the need to deepen the non-interest capital market space. This is to enable millions of Nigerians and people of faith to invest savings ethically. Investors worldwide are increasingly allocating their resources into Islamic finance products,’’ Gwarzo said.
The SEC DG said last year is widely considered a landmark year for Islamic finance, especially with landmark debut sukuk issuances by countries such as the UK, Hong Kong, Senegal, South Africa, and Luxemburg. And the year also witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like Turkey and Indonesia. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding.
In Nigeria, Gwarzo said the SEC has implemented a number of reforms aimed at deepening the non-interest capital market. For example, he said the Commission focused on the regulatory framework, reviewing the Rules and introducing new ones.
” In particular, we issued rules on Islamic Fund Management as well as rules on Sukuk issuance.
These two legal frameworks have encouraged Islamic product innovation with the registration of 5 ethical/shariah compliant funds and the issuance of Nigeria’s first ever sub-national Ijara Sukuk by the Osun State government in 2013 which was oversubscribed. We are also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications” he said.
The director-general said that state governments could leverage on the Sukuk market to raise funds for developmental projects.
Going forward, he said the Focus of the SEC will be on massive public enlightenment and also stronger capacity building initiatives adding that is what informed the idea of hosting regional roundtable events such as the Roundtable
We are working closely with the Debt Management Office (DMO) to ensure Nigeria issues her first sovereign sukuk that will provide the needed benchmark for other categories of issuers. We are hopeful there will be a significant progress on this front before the end of 2016. Once again, I thank you for your distinguished presence here while enjoining you to make the most of the opportunities this platform presents.
In his remarks, Gov. Aminu Tambuwal of Sokoto State said that the state government had since resolved to embrace Sukuk.
Represented by the Commissioner for Finance, Alhaji Sa’idu Umar, Tambuwal said that the Islamic capital system conformed with the religious and cultural beliefs of the people of the state.
The governor said that the system provided alternative sources of funds, especially in view of the dwindling revenues occasioned by the falling global oil resources.
The Governor of Zamfara, Alhaji Abdulazeez Yari, represented by Alhaji Shehu Baraya, the Acting Accountant-General of the state, urged Nigerians to embrace Islamic capital for meaningful national development.
The Sultan of Sokoto, Alhaji Sa’ad Abubakar, represented by the Emir of Gwandu, Alhaji Ilyasu Bashar, commended the commission for organising the roundtable.
Abubakar said that ‘`Sukuk’’ provided alternative sources of funds for the development of the nation.