Fitch Ratings has predicted a sustained growth trajectory for the Nigerian Islamic finance industry in 2023 and 2024.
The report said the growth would ride on the back of government sukuk issuance and policy push but was still likely to remain nascent in the medium term.
According to the ratings, Nigeria, although small by global comparison, houses the largest sukuk market in Africa with an outstanding issuance of N755.5bn.
The report said the size of the Nigerian Islamic finance industry was estimated at $2.9bn as of 2022, with outstanding sukuk being the largest segment at 57 per cent, followed by Islamic banks at 42 per cent, and the remaining one per cent between Islamic funds and takaful.
“The long-term potential is significant as Nigeria has the largest Muslim population in Africa with a large unbanked population.
“In 2022, the Federal Government of Nigeria issued a seven-year sukuk raising N130bn, its fifth issuance since 2017 with above 1.6x subscription.
“The Securities and Exchange Commission is aiming to make Nigeria a hub in Africa for Islamic capital-market products as part of the government’s ‘Revised Plan 2021-2025.”
It noted that SEC targeted 50 listings of Sharia-compliant products with a market capitalisation of at least N5tn by 2025.
“Last year also saw Taj Bank Limited’s launch of a N100bn Mudaraba sukuk programme in 2022 to raise tier 2 capital,” Fitch said.
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