The Federal Government, through the Securities and Exchange Commission (SEC), on Thursday, disclosed that it has issued six Sovereign Sukuk worth N1.1 trillion ($657.6M), to finance 124 federal road projects covering over 5,820 kilometers across the six geopolitical zones of the country.
The commission said this in a statement in Abuja, by it’s Director General, Dr. Emomotimi Agama, at the ongoing 2nd International Islamic Capital Market Conference in Karachi, Pakistan.
Dr. Agama said the success rate makes the Islamic Capital Market, ICM, stand out as a resilient and innovative tool for mobilizing resources.
He described the issuance of sovereign Sukuk since 2017 as a key pillar responsible for growth of the ICM in Nigeria adding that these issuances have consistently been oversubscribed, with subscription rates reaching as high as 441%.
He disclosed that sub-national and corporate Sukuk issuances are also growing in Nigeria with notable examples like Osun and Lagos states’, Family Homes Ltd, and TAJ Bank Plc, along with private Sukuk issuances by three other sub-nationals.
He noted that these instruments have been instrumental in funding school infrastructure, housing and a first of its kind in Nigeria, tier 1 capital for a bank and underscores the versatility of Sukuk as a financing tool.
“Beyond Sukuk, the ICM segment in Nigeria offers diverse investment opportunities. From one registered fund in 2008, the segment currently boasts of 14 registered Halal mutual funds with a net asset value exceeding N105 billion as of November 2024. The NGX Lotus Islamic Index tracks 11 Shariah-compliant equities, while Nigeria’s first Islamic Real Estate Investment Trust – ChapelHill N-REIT – highlights the potential of real estate investments.
“The prospects for Nigeria’s Islamic finance industry are underpinned by key growth drivers, both global and domestic. Globally, demographic trends, economic diversification efforts in oil-dependent economies, and regulatory support have spurred demand for Shariah-compliant products.
“Locally, Nigeria’s large Muslim population, government-backed Sukuk initiatives, and growing investor awareness are driving market expansion. Emerging innovations in fintech also present further opportunities for market development. In that regard, the SEC registered the first Robo advisory firm in the Nigerian Capital Market in 2022. This Robo Advisor is focused on Shari’ah-compliant investments.”
Agama said the success of the ICM in Nigeria is deeply rooted in its strategic focus on infrastructure financing, financial inclusion, and sustainability as the SEC’s engagement with the ICM dates back to 2004, when the SEC joined the Islamic Finance Task Force of the International Organization of Securities Commissions (IOSCO).
