London, SEC to strengthen Islamic finance in Nigeria

The Securities and Exchange Commission and the City of London on Tuesday pledged to work together to deepen Islamic finance in Nigeria in order to bring financial inclusion to Nigerian Muslims and non-Muslims averse to traditional financial system and products. The Lord Mayor of London, Mr. Alderman Yarrow, and the Director-General of Securities and Exchange Commission, Mr. Mounir Gwarzo, made the pledge at a Roundtable meeting with Nigerian regulators on non-interest finance in Abuja on Tuesday. Yarrow said London with six Islamic banks and another 20 lenders currently offering Islamic financial products and services had the capacity to help Nigeria to deepen its Islamic financial system. He said, “We want our Nigerian friends and partners to see London as Nigeria’s international companion whatever type of expertise is required. From looking at Nigeria’s legal framework, to helping to up skill your young, dynamic and ambitious population, London has the expertise, the variety and the capacity to help. And most of all, we offer the willingness. “Only a few months ago, UK’s Chancellor of the Exchequer – which is really the name of our Finance Minister – stood beside me and the Governor of the Bank of England and he spoke about the importance of Islamic finance. “He has made regulatory and fiscal changes making it easier to establish Islamic banks, offer Shariah-compliant products and in general enable British Muslims to engage with the financial system in a way consistent with their faith. Islamic finance is really one of the UK’s strengths.” He added, “The UK is the leading centre for Islamic finance outside the Muslim world. And it is our tradition to stand alongside Dubai and Kuala Lumpur as the main global hubs for Islamic finance. Britain became the first country outside the Muslim world to issue an Islamic bond or ‘simul’ last year. The 200m pound bond attracted healthy investor interest and was the first step in encouraging wider investment. “The UK government has supported that effort. But two things were universally agreed on, Islamic finance will be massive and it’s here to stay. “That is equally true here in Nigeria with about 88 million Muslims and 39 per cent of the adult population unbanked. There is a huge opportunity to offer Islamic finance as an alternative investment and finance model for both Muslims and non-Muslims alike. I am here as an ambassador for UK services.” At the Roundtable, Gwarzo, who was represented by the Executive Commissioner, Corporate Services at SEC, Mr. Zakawanu Garuba, said the commission was considering modalities for setting up a Sharia advisory council as a body of experts to advise it on non-interest product applications. “Our goal is to boost non-interest capital market product innovation so that the segment can be at least a quarter of the overall market capitalisation,” Gwarzo said. He explained that the commission’s aim was to build a strong regulatory regime for non-interest products, encourage stakeholders in the non- interest capital market and ensure the emergence of Nigeria as a prominent non-interest capital market hub regionally and globally. To boost the liquidity of non-interest products, Gwarzo said the commission was working with a committee to support the FMDQ over-the-counter platform to enable secondary market trading of the products. He added, “Over the years, SEC has taken a leading role in deepening the non-interest finance space in Nigeria. Particularly, we developed very robust rules on Sukuk issuance which have already enabled the Osun State government to issue Nigeria’s first ever Ijarah Sukuk.” “We would be delighted to leverage London’s wealth of capacity and experience in this regard. We would be most delighted to get any form of assistance in building a vibrant non-interest capital market in Nigeria that will help push national aspirations for inclusive socioeconomic development.”