Nigerian Exchange Limited (NGX) and Islamic Development Bank Institute (IsDBI) joined forces to conduct a capacity-building workshop aimed at fostering the issuance of Islamic finance instruments. The workshop, held in Lagos, focused on educating issuers and investors about contemporary issues, practices, and opportunities in Islamic finance.
Key Points:
- Workshop Theme: The workshop was themed “Economic Growth and Business Development Opportunities Through the Islamic Capital Markets.” It aimed to provide participants with insights into how Islamic finance can drive inclusive growth and sustainable business practices in Nigeria.
- Potential of Islamic Finance in Nigeria: The Executive Director, Capital Markets at NGX, Mr. Jude Chiemeka, highlighted the potential of Islamic finance in Nigeria. He mentioned that the Nigerian Islamic finance industry was estimated at $2.9 billion at the end of 2022. Sukuk (Islamic bonds) constituted the largest segment at 57%, followed by Islamic banks at 42%, with Islamic funds and takaful making up the remaining 1%.
- Islamic Finance’s Impact: Chiemeka emphasized that Islamic finance has increased access to banking services for underserved Muslim populations, facilitated financing for SMEs through its risk-sharing characteristics, and provided suitable financing options for infrastructure projects through Sukuk. Nigeria, with a significant Muslim population, stands to benefit from the long-term potential of Islamic finance.
- Presentation on Applying Islamic Finance to Nigeria’s Economy: Mr. Syed Faiq Najeeb, Senior Islamic Finance Specialist at IsDBI, delivered a presentation on applying Islamic finance to Nigeria’s economy. He highlighted partnership and solidarity-based models, focusing on real economic-activity-based financing and investment in infrastructure and real estate. The principles of governance, ethics, and fairness in Islamic finance create opportunities for value creation with fewer competitors.
- Driving Sustainable Economic Growth: Najeeb pointed out that Islamic finance’s risk-sharing, profit-sharing, loss-absorbing mechanisms, and absence of zero-sum games can contribute to sustainable economic growth. The focus on real economic activities aligns with the principles of Islamic finance.
- Optimism for Future Product Issuances: Mr. Kazeem Alimi, Head of Secondary Markets at NGX, expressed confidence that the knowledge gained from the workshop would lead to more product issuances in the Islamic finance space, especially from corporates.
Conclusion: The collaboration between NGX and IsDBI in conducting this workshop reflects a strategic effort to deepen the understanding and adoption of Islamic finance in Nigeria. By educating issuers and investors, the initiative aims to contribute to the growth of Islamic finance and its positive impact on economic development in the country.
