CBN Headquarters, Abuja
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, Monday disclosed plans by the apex bank to sell its first ‘sukuk’ within 18 months.
The sovereign ‘sukuk,’ according to the banking sector regulator, will help arouse interest in Islamic banking in the country.
THISDAY gathered that the ‘sukuk’ is the Arabic name for financial certificates. It is however, commonly referred to as the Islamic equivalent of bonds. Given that fixed income and interest bearing bonds are not permissible in Islam; ‘sukuk’ securities are structured to comply with the Islamic law and its investment principles, which prohibit the charging, or paying of interest.
Islamic Banking is a non interest type of banking that is different from the conventional banking in so many ways. It is based on Islamic law of economics and works in such a framework that follows certain rules and regulations. This form of banking also proscribes usury, trading in financial risk (gambling) and investing in such businesses that are against the general principles of ethics.
Sanusi who dropped this hint in an interview with Reuters at a conference on Islamic finance also said that the Debt Management Office (DMO) was working on policies to facilitate the endorsement of the sale of the Islamic bonds.
The CBN Governor added: "We are working with the DMO. The central bank is collaborating with them on capacity building. We do have a target of issuing a first sovereign ‘sukuk’ in Nigeria within 18 months."
Sanusi has always expressed his desire to create an Islamic banking market. The banking watchdog believes that the products will act as a stabilising force for the industry. To him, developing Islamic banking products will help the country to attain financial stability.
He had said that he intended to position the country as the African hub for Islamic banking by emulating the success of the Islamic Banking industry in Malaysia. Sanusi had also emphasised that given the population of Nigeria, the country can be positioned to be the African hub for Islamic banking.
“We start from the premise that if we are going to go into Islamic banking, we are not interested in licensing just one bank. Islamic banking products are tied to the real economy, so they are part of our reform programme of getting banks to lend to the real economy. They also discourage excessive speculation and risk taking, which is consistent with some of the new guidelines we are putting in place,” Sanusi had said.