‘Non-interest market catalyst for growth’

The alternative non-interest financial services market in Nigeria has enormous potential and can serve as a major boost for national economic growth.

Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, said the non-interest capital market sector is unique and full of potential to facilitate the objective of deepening the financial system and spurring the growth of the economy.

He spoke at the opening ceremony of the Executive Programme on Non-Interest (Islamic) Capital Market (NICM) Products and Basic Accounting Treatment organised by Islamic Financial Services Board (IFSB) based in Malaysia, and the Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) based in Bahrain.

According to him, the recent sovereign issuances of Sukuk by the Debt Management Office (DMO), which were oversubscribed, stressed the need to enhance Nigeria’s regulatory capacity as the sovereign Sukuk issuances have set the benchmark for other corporates to issue Sukuk for various developmental activities.

“It is worthy of note that whilst the non-interest capital market sector in Nigeria is nascent and unique, it is a market full of potential to facilitate the objective of deepening the financial system and spurring the growth of our economy,” Yuguda said.

He noted that SEC’s quest for in-depth knowledge of non-interest capital market products, operations, and services is further underscored by the recent increase in market activities such as the entrance of more assets managers, investment advisers, real estate investment trusts and advisory experts to provide new asset classes for investors.

He pointed out that SEC had in its efforts to deepen the capital market developed a 10-year, 2015-2025, Masterplan with various strategic recommendations, one of which was to drive the non-interest capital market segment of the market to enable it contribute not less than 25 per cent of the total market capitalisation.

“Although, we can confidently report some remarkable achievements recorded in the segment, six years into the implementation of the Masterplan, the non-interest capital market segment is still facing challenges in terms of innovation, awareness, acceptance and coverage.  These challenges underscore the need to provide focused training, capacity building and vigorous stakeholder engagement and awareness programmes,” Yuguda said.

He expressed confidence that the IFSB and OOAIFI have assembled subject matter experts for the training to ensure that the SEC not only gain the requisite knowledge on the non-interest capital market segment but also optimally leverages the global experiences of the facilitators to guide it in facilitating the development of the sector.