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Nigeria’s Capital Market Masterplan sets 2025 for listing 50 Shariah compliant products worth N5trn

SEC DG says capital market can finance PPP infrastructure projects

The Securities and Exchange Commission (SEC) has said that the revised edition of the Capital Market Masterplan (2021 – 2025) that was recently launched has a projection of 50 listings of Shariah-compliant products with a market capitalisation of at least N5 trillion by the year 2025

This was disclosed on Wednesday by the Director General of SEC, Lamido Yuguda during 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.

Yuguda who was represented by the SEC’s Executive Commissioner Operations, Dayo Obisan, said that the Non-Interest Capital Market (NICM) also has the following new targets: ensuring 100 retail Shariah-compliant products; and 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 noted that with these new responsibilities, promoting capacity-building programmes, such as the Workshop, on Shariah-compliant processes and products (Regulators and Operators) has become necessary for the NCIM.

He said the Commission, in recognising the potentials 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.

Specifically, 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, is 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.

DG said the workshop is aimed at exposing participants who have the potential to provide Shariahadvisory services for the Islamic Finance Industry, particularly the Non-Interest Capital Market’s operations as it relates to Shariah principles and rulings. It is also planned to be in two levels, Level 1 and 2.
He stated that Level 1, is focused on the basic areas of Financial Market Structure and Operations of the Capital Market, Shariah principles and contracts relating to Non-Interest Capital Markets as well as Shariah issues relating to the operations and businesses of the Market, among others while level-2 which will address the operation of the Sukuk and Equity Markets.

The SEC Boss said NICM has so much potentials 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.

“We believe that developing Shariah talent through a Workshop like this, is another opportunity of creating awareness for the Non-Interest Capital Market products and services which in turn will facilitate the Financial Inclusion drive in the Nigerian Financial System.

“I am happy to note that the Commission recently exposed registration Rules to set a minimum standard for corporate or individuals seeking to provide shariahadvisory services for Non-Interest Capital Market activities. This is to further encourage and attract the attention of qualified persons and entities to engage in the Shariah advisory function for Non-interest Capital Market.

Yuguda expressed the confidence that the participants will benefit from the vast knowledge and experience of the facilitators, which will bring about a much-needed impact on the participants and the market in general.