Global Islamic Finance Industry Assets Over $2 trn – SEC DG

Director- General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo has said total assets under management in the global Islamic finance industry had surpassed $2 trillion (N394 trillion) at the end of 2014, remarking that this is even as the global sukuk market continues to witness remarkable growth after the 2008 global financial crisis as annual issuances has grown from $15 billion in 2008 to almost $120 billion in 2014.
The director-general stated this at the second Regional Roundtable on Non-Interest Capital Market held in Sokoto on Monday.

Gwarzo said that the focus of the roundtable was on “Sukuk’’- one of the most important components of the Islamic financial system, noting that while most people identify capital markets as an important source of medium-to-long term capital, few realise the amazing potential of capital markets to serve as a catalyst 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 DG said  last year was widely considered a landmark year for Islamic finance, especially with debut of sukuk issuances by countries such as the United Kingdom (UK), Hong Kong, Senegal, South Africa  and Luxemburg, adding that the year also witnessed continued strong interest from key markets in Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like Turkey and Indonesia and that there was no doubt that the sukuk market was emerging on a global scale as a viable alternative source of funding.
In Nigeria, Gwarzo said the SEC has implemented a number of reforms aimed at deepening the non-interest capital market while the commission focused on the regulatory framework, reviewing the rules and introducing new ones.

The director-general said, ” 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.”
The director-general 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 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,” Gwarzo said.
In his remarks, Gov. Aminu Tambuwal of Sokoto State said that the state government had since resolved to embrace Sukuk.

Represented by the Commissioner of Finance, Alhaji Sa’idu Umar, Tambuwal said that the Islamic capital system conformed with the religious and cultural beliefs of the people of the state.

The governor said that the system provided alternative sources of funds, especially in view of the dwindling revenue occasioned by the falling global oil resources.

The Governor of Zamfara, Alhaji Abdulazeez Yari, represented by Alhaji Shehu Baraya, the Acting Accountant-General of the state, urged Nigerians to embrace Islamic capital for meaningful national development.
The Sultan of Sokoto, Alhaji Sa’ad Abubakar, represented by the Emir of Gwandu, Alhaji Ilyasu Bashar, commended the commission for organising the roundtable.

Abubakar said that Sukuk provided alternative sources of funds for the development of the nation.