The Securities and Exchange Commission (SEC) has said Nigeria has the potential to join the leading global Islamic finance jurisdictions. Mr. Lamido Yuguda, Director General, SEC, said this when the Commission in collaboration with the Islamic Financial Services Board (IFSB), hosted the inaugural SECN-IFSB International Forum 2023, in Abuja.

The event brought together leaders and stakeholders fostering discussions, collaboration aimed at further deepening the NICM in Nigeria. Speaking at the first day of the SECN-IFSB International Forum on Non-Interest Capital Markets, Yuguda set the stage for insightful conversations and a deep dive into global and regional trends in non-interest capital markets.

He expressed the belief that “Nigeria has the potential to join the leading global Islamic finance jurisdictions when we deal with challenges such as inadequate awareness, regulatory harmonisation, and enactment of legislations that enhance legal certainty and clarity similar to what prevails within the conventional financial architecture.”

In similar fashion, Dr. Bello Lawal Danbatta, Secretary-General, IFSB, in his keynote address, commended SEC Nigeria and the government for their dedication to cultivating a resilient non- interest capital market.

“Nigeria’s Non-Interest Capital Market stands as a harmonious testament to financial innovation and progress, seamlessly weaving together the threads of ethical finance and conventional wisdom.

“The IFSB is honoured to be contributing our efforts, paired with the visionary leadership of the SEC and the Government at this stage that resonates with international regulators, market players, and policymakers – to cultivate a dynamic ecosystem where knowledge blossoms, preferences flourish, and inclusivity thrives,” he said.

In his remarks, Mr. Wale Edun, the Honourable Minister of Finance and Coordinating Minister for the Economy underscored the significance of non- interest capital markets in Nigeria’s economic landscape and the promotion of financial inclusion.

The minister highlighted the necessity for alternative financing mechanisms that prioritise equity participation over interest bearing financing models, emphasising that this approach is crucial for addressing the global debt crisis and fostering swift and inclusive growth.

A pivotal moment during the forum was the signing of a Memorandum of Understanding (MoU) between SECN and IFSB, solidifying closer collaboration, support, and the exchange of information, research, development, training, and education. The historic agreement outlines a framework for the enhancement of Shariah-compliant non-interest capital markets in the region.

The event also witnessed the launching of IFSB’s Annual Report, developed to provide a comprehensive overview of the international standard-setting organisation’s operations, accomplishments, and progress towards promoting the stability and growth of Islamic finance globally.

The forum’s discussions delved into crucial market developments and opportunities, with a particular focus on global and regional trends on non interest capital markets, sustainable green and ESG sukuk, and the role of non- interest capital market instruments in infrastructure financing.

Key recommendations include enhancing Non-Interest Capital Markets (NICM) in Nigeria through measures such as increasing awareness, establishing legal frameworks for infrastructure funding, enacting legislation for Islamic Capital Markets (ICM), providing capacity building for scholars, addressing regulatory bottlenecks, fostering collaboration among stakeholders, and leveraging technology for financial inclusion.

The discussions underscore the significance of uniform standards, public awareness, and targeted strategies to deepen the takaful sector. Moreover, there were recommendations for regular coordination meetings, the establishment of a think-tank, collaboration with academia, capacity building for conventional institutions, and exploration of innovative financing models for infrastructural projects.

The sessions showcased a notable line up of participants, including representatives from institutions such as the Central Bank, AMF-UMOA, NAICOM, Nigeria Deposit Insurance Corporation, Debt Management Office, National Pension Commission, Investment and Securities Tribunal (IST), and Financial Regulation and Advisory Council of Experts (FRACE).

Leadership figures from capital market trade groups, operators, industry players, and members of the press also actively contributed to the discussions. As drivers of sustainable and innovative Islamic finance practice, the IFSB and SECN conducted the 5th Innovation Forum which saw the convergence of industry players and other stakeholders discussing the latest developments in innovation in Islamic finance.

Sessions explored digital innovation, fintech’s role in harnessing shariah-compliant non-interest finance for financial inclusion, and regulatory issues.