Finance

Nigeria is Africa's largest sukuk market (Fitch Ratings)

Nigeria is Africa's largest sukuk market (Fitch Ratings)
Thursday, 26 January 2023 20:27

(Ecofin Agency) - According to recent research by the international rating agency Fitch Ratings, the Nigerian Islamic finance industry is expected to continue to grow over 2023-2024, supported by the issuance of sukuk, the growth of Islamic financing, and flexible regulations.

Nigeria, home to Africa's largest Muslim population, is also the largest sukuk (Islamic financial securities equivalent to bonds in conventional finance) market in Africa, with NGN755.5 billion (US$1.6 billion) in outstanding securities, according to Fitch Ratings.

In research published Wednesday, Jan. 25, the rating agency reports that the Nigerian government raised NGN130 billion (about US$282 million) by issuing sukuks. The operation was the fifth sukuk issuance organized by the country since 2017.

In addition to the Nigerian federal government, other financial institutions also launched sukuk issuance programs in 2022. for instance, the Islamic bank TajBank Limited launched an NGN100 billion (about US$222 million) sukuk mudaraba program last year. 

In such conditions, Fitch expects Islamic finance in Nigeria to grow further in 2023-2024, supported by government sukuk, increased financing by newly established Islamic banks in the country, and regulations that are less restrictive for Islamic Finance than they are for conventional finance.

Let's note that only three full-fledged Islamic banks are operational in Nigeria. Deposit collection remains limited for those banks due to their limited presence throughout the country. In addition, local populations are not sufficiently aware of the existence of Islamic financial products.

Despite those challenges, in the first half of 2022, Islamic banking assets grew by 71% year-on-year, with the size of the Nigerian Islamic finance industry reaching about US$2.9 billion by the end of 2022.

Chamberline MOKO

On the same topic
Nigeria targets 300 billion naira (about $186.7 million) through a sukuk to build roads. The bond offers a 19.75% annual return and is open for...
 Algeria and Oman will each contribute to a $300 million joint investment fund.  The fund will target food security, mining, oil and...
. Citigroup is holding talks with governments in Benin and Namibia to grow its presence. . The bank is playing a key role in Benin's bond sales and...
• Spain will fund Casablanca’s seawater desalination plant with $381 million in financing• The plant will supply drinking water to over 6.7 million...
Most Read
01

Tanzania will now require all local transactions to be priced and paid in Tanzanian shillings. ...

Tanzania Bans Use of Foreign Currencies for Domestic Transactions
02

KoBold Metals, the U.S.-based mining company backed by heavyweight investors including Bill Gates an...

KoBold Metals Steps Up to Secure Manono Lithium Deposit in DR Congo
03

This initiative reflects ECOWAS’s commitment to a results-driven, people-centred digital transformat...

ECOWAS, World Bank Launch Regional Workshop to Advance Digital Integration
04

• MTN to distribute 1.2 million 4G smartphones at $5.42 for prepaid users.• Move supports South...

MTN South Africa to Sell 4G Smartphones for $5 to Boost Network Upgrade
05

• PalmPay plans to enter South Africa, Côte d’Ivoire, Uganda, and Tanzania by late 2025• The fintech...

Nigeria’s PalmPay to Expand into 4 African Countries by End of 2025
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

Benjamin FLAUX
bf@agenceecofin.com 
Téls: +41 22 301 96 11 
Mob: +41 78 699 13 72
Média kit : Download

EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.