The Securities and Exchange Commission (SEC) has announced that the Federal Government of Nigeria has issued six Sovereign Sukuk worth ₦1.1 trillion ($657.6 million) to finance 124 road projects spanning over 5,820 kilometers across the country’s six geopolitical zones. The announcement was made by SEC Director General, Dr. Emomotimi Agama, during the 2nd International Islamic Capital Market Conference in Karachi, Pakistan.
Dr. Agama highlighted that the Sovereign Sukuk initiative, which began in 2017, has been a cornerstone of the growth of Nigeria’s Islamic Capital Market (ICM). The issuances have consistently been oversubscribed, with subscription rates reaching up to 441%, underscoring strong investor confidence. These funds have been pivotal in driving infrastructure development, including road networks, schools, housing, and even tier-1 bank capital—a first of its kind in Nigeria.
Beyond sovereign initiatives, sub-national and corporate Sukuk issuances are also gaining traction. States like Osun and Lagos, along with organizations like Family Homes Ltd and TAJ Bank Plc, have successfully utilized Sukuk instruments to finance projects. Additionally, private issuances by other sub-nationals are fostering further market diversification.
The ICM in Nigeria has also seen a surge in investment opportunities. From a single registered Halal mutual fund in 2008, the segment has grown to 14 funds with a net asset value exceeding ₦105 billion as of November 2024. The NGX Lotus Islamic Index, tracking 11 Shariah-compliant equities, and Nigeria’s first Islamic Real Estate Investment Trust (ChapelHill N-REIT), further demonstrate the market’s potential.
Globally, the demand for Shariah-compliant products is driven by demographic shifts, economic diversification, and regulatory support. Locally, Nigeria’s large Muslim population, government-backed Sukuk programs, and rising investor awareness are fueling growth. The introduction of fintech innovations, such as the first Robo-advisory firm focused on Shariah-compliant investments, also signals new avenues for market expansion.
Dr. Agama credited the SEC’s Non-Interest Capital Market Master Plan (2015–2025) for the remarkable progress in the ICM. This plan envisions the Islamic Capital Market contributing 25% of Nigeria’s total market capitalization by 2025, with Sukuk accounting for 15%. A mid-term review in 2021 set a target of 50 Shariah-compliant listings worth ₦5 trillion ($11 billion) by 2025.
With nine of the 15 initiatives in the roadmap fully implemented as of 2022, notable achievements include increased retail participation in Sukuk, tax guidelines for Non-Interest transactions, and the launch of the Non-Interest Pension Fund (Fund VI) in collaboration with the National Pension Commission. However, challenges such as limited public awareness, scarcity of tradable instruments, and the need for regulatory alignment persist.
To address these, the SEC is prioritizing capacity building in Shariah governance and compliance, while collaborating with stakeholders to develop innovative solutions like Shariah-compliant housing finance. These efforts aim to deepen the market further, attract ethical investors, and solve critical issues such as infrastructure deficits, financial exclusion, and low mortgage penetration.
Dr. Agama concluded by urging both domestic and international investors to capitalize on the growing Islamic Finance opportunities in Nigeria. “The stage is set for investments that balance competitive returns with ethical and sustainability concerns. This is a significant opportunity to contribute to Nigeria’s economic growth and financial inclusion, and by extension, the African continent,” he said.
The success of Nigeria’s ICM underscores its potential to drive sustainable economic development while meeting the needs of a diverse and evolving investor base.
