By Goddy Egene
The Director General of Securities and Exchange Commission (SEC), Mounir Gwarzo has said the Nigerian capital market has amazing potential to serve as a catalyst for financial inclusion.
Gwarzo stated this on Monday at the second Regional Roundtable on Non-Interest Capital Market in Sokoto.
According to him, while most people identify capital markets as important sources of medium-to-long term capital, few realise their amazing potential to serve as catalysts for financial inclusion.
“SEC is determined to unlock this potential of the Nigerian capital market. In particular, we are aware of the need to deepen the non-interest capital market space. This is to enable millions of Nigerians and people of faith to invest savings ethically. Investors worldwide are increasingly allocating their resources into Islamic finance products,’’ Gwarzo said.
The SEC boss disclosed that total assets under management in the global Islamic finance industry had surpassed $2 trillion (N394 trillion) by the end of 2014. He added that the global sukuk market continued to witness remarkable growth since after the 2008 global financial crisis with annual issuances growing from $15 billion in 2008 to almost $120 billion in 2014.
He noted that last year is widely considered a landmark year for Islamic finance, especially with debut sukuk issuances by countries such as the United Kingdom, Hong Kong, Senegal, South Africa, and Luxemburg.
The year, he added, also witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like Turkey and Indonesia. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding.
Gwarzo said in Nigeria, SEC has implemented a number of reforms aimed at deepening the non-interest capital market. For example, he said the Commission focused on the regulatory framework, reviewing the Rules and introducing new ones.
” In particular, we issued rules on Islamic Fund Management as well as rules on Sukuk issuance. These two legal frameworks have encouraged Islamic product innovation with the registration of five ethical/shariah compliant funds and the issuance of Nigeria’s first ever sub-national Ijara Sukuk by the Osun State government in 2013 which was oversubscribed. We are also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications,” he said.
The DG said that state governments could leverage on the Sukuk market to raise funds for developmental projects.
Going forward, he said the focus of the SEC would be on massive public enlightenment and also stronger capacity building initiatives, adding that is what informed the idea of hosting regional roundtable events such as the Roundtable
“We are working closely with the Debt Management Office (DMO) to ensure Nigeria issues her first sovereign sukuk that will provide the needed benchmark for other categories of issuers. We are hopeful there will be a significant progress on this front before the end of 2016. Once again, I thank you for your distinguished presence here while enjoining you to make the most of the opportunities this platform presents,” he said.