Yemisi Izuora
The securities and Exchange Commission (SEC) said it is determined to deepen the non-interest capital market space so as to enable millions of Nigerians invest their savings ethically.
Director General of SEC, Mounir Gwarzo who stated this at a regional round table on Non-Interest Capital Market in Kano, with the theme “Financing Development through Islamic Capital Market – A Viable Alternative ” observed that Investors all over the world are increasingly allocating their resources into Islamic finance products adding that by the end of 2014, total assets under management in the global Islamic finance industry surpassed $2 trillion.
Gwarzo said while most people identify capital markets as an important source of medium-to-long term capital flow, there is also an amazing potential of capital markets to serve as a catalyst for financial inclusion adding that going forward, the SEC will focus on massive public enlightenment and also stronger capacity building initiatives.
According to him, Our focus for this roundtable is on Sukuk, one of the most important components of the Islamic financial system. 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.
In fact, 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. Of course the year 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.
While describing Malaysia, Saudi Arabia, UAE, Kuwait and Qatar as the top 5 largest Islamic finance markets in the world, in that order as they account for the highest sukuk issuances and contribute more than half of the total assets under management in the industry, Gwarzo said that with Nigeria’s population which is far more than all five countries put together, the country should be a major market for global Islamic finance market.
” With over 80 million Muslims, Nigeria is home to far more Muslims than all the 5 countries put together. Additionally, Nigeria has a larger economy than them, with the exception of Saudi Arabia. There is therefore no reason why Nigeria should not be a major global Islamic finance market” he said.
To transform Nigeria’s potential to reality in this regard, Gwarzo said the SEC in 2013 set up an industry-wide committee of experts to develop a strategic blueprint for the growth and development of Nigeria’s non-interest capital market. Their recommendations said. have been incorporated in the 10-year Capital Market Master Plan which is currently being implemented by the SEC.