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.
He stressed 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