N5 trillion worth of Sharia-compliant products to hit capital market by 2025
50 Sharia-compliant products with a market capitalisation of N5 trillion are expected to be listed between now and 2025.
This is in line with the revised edition of the Capital Market Masterplan (2021–2025) which was launched recently by the Securities and Exchange Commission (SEC).
The Director General of the SEC, Mr Lamido Yuguda, stated this at the opening of a three-day capacity-building workshop for local Shariah talent for the non-interest capital market, held at the SEC head office in Abuja on Wednesday.
New targets: Yuguda, who was represented by the SEC’s Executive Commissioner of Operations, Mr Dayo Obisan, highlighted the new targets of the non-interest capital market (NICM). They include the following:
- Ensuring 100 retail Shariah-compliant products
- Projection of 1 million or more direct investors in Shariah-compliant products with at least N5 trillion investment by institutional investors in Shariah-compliant products.
Yuguda also noted that with these new responsibilities, promoting capacity-building programmes has become necessary for the NCIM.
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Potentials of Non-Interest Capital: He said the Commission, in recognizing the potential of the Non-Interest Capital Market for economic growth, dedicated a component in its ten-year (2015-2025) Capital Market Masterplan for the speedy development of the Market in the Financial system.
Yuguda said the Masterplan provides clear Strategic Objectives for the development of the Market, one of which is the “encouragement of the development of stakeholders for the Market” and today’s workshop is evidence of the realization of this particular objective.
The stride and significant achievements recorded by the Masterplan he said are evidenced by the last ranking of Nigerian Islamic Finance in 13th place on the global Islamic Finance Development Indicator 2021, with the assets under Management valued at N2.30 billion; which is higher than countries like Bangladesh and Turkey.
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- “As you may be aware, the major difference between Conventional Finance and Non-Interest Finance is the application of Shariah principles. This simply means that Non-Interest Financial Market cannot exist without experts in Islamic commercial jurisprudence (FiqhulMu’amalat Al-Maliyya). Therefore, this Workshop will help in fast-tracking the development of experts for the Market. We believe that it would be a magic lamp for developing our local Sharia talent, not only for Nigerian Capital Market but for the Nigerian Financial system in general.
- “The level of activities in the Non-Interest capital market that we are currently experiencing in Nigeria affirms the overwhelming acceptance of NICM products by the country’s populace. This shows a strong appetite for other alternative forms of investments. Recently, the Market witnessed the entrance of institutions offering Non-Interest capital market services/products and the oversubscription of the FGN and corporate Sukuk, further buttresses the need for this workshop to encourage the development of Shariahexperts for the Market”.
The SEC Boss said NICM has so much potential in the country by attracting an untapped investor base who appears indifferent to conventional instruments, to participate in the capital market as well as the existing investors to diversify to ethical and socially responsible investments.