Economy
Explainer: What is Nigeria’s SEC New Rule on Shariah Advisory Services?
By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has revealed new rules on Shariah Advisory Services for non-interest capital market products and services.
According to the SEC, Shariah governance is crucial, considering compliance with Shariah rules and principles is important in non-interest capital market operations/transactions.
“The provision of the rules is in line with local and international best practices. The regulatory organisation in the Nigerian Financial System, such as CBN and NAICOM, have issued such guidelines to provide clear and good Shariah governance in their respective sectors.
“Making the Shariah Advisory service a registrable function in the market will assist in effective implementation of the proposed consolidation of the Shariah governance rules and will also be an additional source of revenue to the commission,” the agency stated.
SEC stated that the non-interest capital market activities in recent times are exponentially increasing as the market is witnessing the entrance of more asset managers, the emergence of i-REIT, listing of sovereign Sukuk on the exchanges, issuance of corporate Sukuk, the emergence of shariah advisory function, among others.
“These developments, coupled with the necessity of Shariah services for the market, affirms the critical need for a framework/guideline to set a minimum standard for persons (corporate or individual) seeking to provide shariah advisory services for non-interest capital market activities.
“The guideline is essential for the development of this nascent sector, as it will promote transparency and confidence whilst creating a level playing field for all participants in the market.”
Further to the above, the commission stated that a review exercise on its existing rules on shariah governance undertaken by the Standing Committee of Deepening Non-interest Capital Market led to the recommendation that rules be drafted to provide for the registration and regulation of shariah advisory services in line with international best practices. Hence, the proposed Rules for Shariah Advisory Services for Non-Interest Capital Market Products and Services.
Going by the Rule, an issuer or fund manager, with the consent of the trustee (where applicable), shall appoint a Shariah Adviser to provide Shariah Advisory services for Shariah products, issuances, and schemes.
A capital market operator seeking to provide Shariah-compliant products and services shall appoint a registered Shariah Adviser for the firm and notify the Commission of such appointment within five (5) business days of the appointment.
The rule stipulates that the SEC may register a Shariah Adviser or renew the registration of a registered Shariah Adviser subject to the applicant satisfying some criteria.
This means that only an individual eligible to provide Shariah Advisory services under these rules shall satisfy the following requirements and this can only be done by a person that meets the following requirement: Possession of a minimum of a Bachelor’s degree in Shariah, which includes study in Usul Fiqh (principles of Islamic jurisprudence) or Fiqh Muamalat (Islamic transaction/commercial law) or a person with vast knowledge in Usul Fiqh (principles of Islamic jurisprudence) or FiqhMuamalat (Islamic transaction/commercial law) acquired through Islamic system of education.
Others include the ability to read and write in Arabic and English Language respectively and possession of basic knowledge of business or finance, particularly in Islamic finance and capital market.
On experience, the applicant is expected to have at least two years of relevant experience in Islamic finance; or have at least one year of relevant experience in Islamic finance and have attended at least five relevant Islamic finance courses/workshops.
The rule also states that the roles and responsibilities of a Shariah adviser shall include: Advising on all aspects of the Non-Interest Capital Market Products and Services, including documentation and structuring;
Issuing Shariah certification, which outlines the basis and rationale of the structure and mechanism, the applicable Shariah principles used and relevant Shariah matters relating to the documentation of the Non-Interest Capital Market Products and Services; Providing Shariah expertise/guidance on all matters, particularly on investment instruments and Reviewing compliance reports of the Shariah product’s proceeds utilization (where applicable) to ensure that investment activities are Shariah compliant.
Other roles and responsibilities are: Providing a periodic report to the trustees certifying whether Sukuk proceeds, Islamic fund, or any other Non-Interest Capital Market products have been managed/administered in accordance with Shariah principles and rules; Ensuring that the applicable Shariah principles and any relevant resolutions and rulings endorsed are complied with; Applying ijtihad (where applicable) to ensure all aspects of the Non-Interest Capital Market products comply with Shariah principles; and accountability for the quality, accuracy, and soundness of his own decision or advice.
The Rule also places some restrictions as a Shariah adviser cannot accept any appointment in more than one registered Islamic Fund Management Company/Fund Management company offering Islamic products provided that the Shariah Adviser could serve in multiple Fund Management Companies with the consent of the Fund Managers, Trustees, and prior approval of the SEC.
Also, a Shariah Adviser is expected to immediately disclose to the Commission, Issuing House, or Fund Manager any circumstances that may affect his ability to meet any of the requirements of the rule.
Registered Shariah Advisers shall be exempted from appointing compliance officers as required under the Commission’s Rules and Regulation on Appointment of Compliance Officers.
By Adedapo Adesanya
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has confirmed that the daily importation of Premium Motor Spirit (PMS), known as petrol, dropped by 67.04 per cent from 44.6 million litres in August 2024 to 14.7 million litres as of April 13, 2025.
This disclosure was part of revelations made by the chief executive of NMDPRA, Mr Farouk Ahmed, during the Meet-the-Press briefing series organised by the Presidential Communications Team (PTC) at the State House in Abuja on Tuesday.
He explained that the 30-million-litre drop in imports was due to increased contributions from local refineries, revealing that domestic production of petrol surged by 670 per cent during the same period.
He credited the rise to the gradual restart of the Port Harcourt Refining Company in November 2024, along with added output from modular refineries across the country.
“After contributing virtually nothing in August 2024, local plants delivered 26.2 million litres per day in early April, a jump from the 3.4 million litres recorded in September 2024, which was the first month with measurable output,” he said.
He, however, said that in spite the growth in domestic supply, total national supply exceeded the government’s 50 million litres per day consumption benchmark.
“Only twice within the eight-month period—56 million litres in November 2024 and 52.3 million litres in February, 2025.
He added that the month of March 2025 saw a slight dip to 51.5 million litres per day, while the first half of April recorded an even lower average of 40.9 million litres per day.
Mr Ahmed emphasised that the NMDPRA issues import licenses strictly in line with national supply requirements, underscoring the authority’s commitment to balancing imports with growing local production capacity.
He called for a collective national effort in protecting and maintaining Nigeria’s oil and gas infrastructure.
According to him, all stakeholders – including security agencies, political leaders, traditional rulers, youths, and oil companies must work together to secure national energy assets.
“It takes all of us—government, traditional institutions, companies, and the youth—to collaborate and resist criminal activities that threaten our infrastructure,” he said.
The CEO also stressed that local government authorities and international oil companies (IOCs) such as the Nigerian National Petroleum Company (NNPC) Limited, as well as indigenous companies, must take responsibility in ensuring that oil assets are protected and maintained.
“Until we all commit to safeguarding these national assets, we should stop pointing fingers,” he added.
Mr Ahmed reaffirmed NMDPRA’s commitment to transparency and accountability in the midstream and downstream sectors.
By Adedapo Adesanya
The Manufacturers Association of Nigeria (MAN) has said the US imposition of 14 per cent tariff on imported products may have a significant impact on Nigeria’s trade and industrial landscape.
The Director-General of MAN, Mr Segun Ajayi-Kadir, in a statement noted that the US remained one of Nigeria’s most significant trade partners, accounting for approximately 7 per cent of its non-oil exports.
President Donald Trump had earlier slammed a reciprocal tariff on all trading partners with the US with Nigeria getting a 14 per cent share. Although, it recently made a pause to the tariffs for a 90-day period, the possible impact remains.
Mr Ajayi-Kadir said the new tariff regime directly threatened this trade dynamic, particularly as Nigeria projected an ambitious N55 trillion budget and was experiencing a downward trend in global crude oil prices.
According to him, the hike has come at a vulnerable moment when the country is just recovering from the impact of the government’s policy mix that has had negative effects on the manufacturing sector.
“Nigeria’s manufacturing sector, which contributed 8.64 per cent to the country’s Gross Domestic Product (GDP) in 2024, is one of the most predisposed sectors of the economy when it comes to trade policy shifts.
“The imposition of a 14 percent tariff on Nigerian exports significantly undermines the competitiveness of locally manufactured goods in the US market.
“Manufacturers who are exporters in agro-processing, chemicals and pharmaceutical, basic metal, iron and steel, non-metallic mineral products and other light industrial manufacturing rely heavily on the U.S. for market access.
“With increased costs for American buyers due to the tariffs, demand for Nigerian products is expected to decline,” he noted.
Mr Ajayi-Kadir stated that in addition to revenue losses, the new tariffs posed a significant disincentive to firms investing in value-added manufacturing.
He noted that over the past decade, manufacturers had made concerted and strategic efforts to support the country’s transition from exporting raw commodities to semi-processed and finished goods.
“However, higher market-entry costs because of higher tariff on Nigerian products will reduce the profitability of such investments, making it more attractive for firms to revert to exporting raw materials.
“This is counterproductive to Nigeria’s industrialisation agenda and compromises the long-term goal of achieving export diversification under platforms such as the African Continental Free Trade Agreement (AfCFTA),” he said.
The MAN DG added that the implications of the tariff imposition on employment in the manufacturing sector were dire.
He noted that as export revenues fall, many companies may reduce their production scale or downsize their workforce to cut costs.
He added that beyond the manufacturing sector, the Nigerian economy was not insulated from the effects of the U.S. tariff decision with its direct impact on Nigeria’s trade balance.
Mr Ajayi-Kadir said with the country already grappling with a fragile external sector, any significant reduction in exports to the U.S. would erode the current trade surplus, potentially pushing the balance into deficit.
He expressed worry about potential pressure on Nigeria to reciprocate by reducing its own tariffs on U.S. goods.
He noted that while the U.S. may frame this as a step toward “fair trade,” the reality was that lowering tariffs on U.S. imports could flood the Nigerian market with subsidised goods, thereby undermining local producers.
“Nigeria has, in recent years, made commendable strides toward achieving self-sufficiency in several manufacturing segments and diversifying away from oil.
“However, succumbing to external pressures to liberalise trade prematurely would reverse these gains.
“Furthermore, the absence of institutional capacity to engage in sophisticated trade negotiations places Nigeria in a vulnerable position.
“While countries with advanced legal and economic institutions may be able to negotiate favourable terms, Nigeria is at a disadvantage due to capacity constraints,” he said.
By Adedapo Adesanya
Nigeria issued 47 Licenses to Establish (LTE) and 30 Licenses to Construct (LTC) refineries in the last year as it seeks to boost oil production in the country.
The move, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), marks a significant step towards enhancing Nigeria’s refining capacity and boosting petroleum products availability.
The chief executive of NMDPRA, Mr Farouk Ahmed, during the sixth Meet-the-Press briefing in Abuja on Tuesday, said the 47 issued licenses have a combined refining capacity of nearly three million barrels per day.
Detailing the breakdown of the licenses, Mr Ahmed stated: “We have issued 47 LTE translating to 1.75 million barrels per day and 30 LTC translating to 1.23 million barrels per day. Currently, only four plants hold LTC with a steady output of 27,000 barrels per day.”
Giving a further breakdown, he said the LTC projects included five which were at the commissioning or construction stage, including the Dangote Petroleum Refinery with a capacity of 650,000 barrels per day while other smaller projects include; AIPCC Energy’s 30,000 barrels per day plant and Waltersmith’s second train with a capacity of 5,000 barrels per day.
Mr Ahmed also highlighted the current state of refining operations in Nigeria, saying six licensed private refineries and four public ones are producing a total of 1.12 million barrels per day.
Other private plants contribute 679,500 barrels per day, led by Dangote’s single-train plant with a refining capacity of 650,000 barrels per day.
Other modular refineries include; Aradel (11,000 barrels per day), OPAC (10,000 barrels per day), Waltersmith (5,000 barrels per day), Duport Midstream Limited (2,500 barrels per day), and Edo Refining and Petrochemicals Company Limited (1,000 barrels per day).
He explained further that publicly owned facilities operated by the Nigerian National Petroleum Company Limited add another 445,000 barrels per day from the refurbished plants in Port Harcourt (150,000 barrels per day), Warri (125,000 barrels per day), Kaduna (110,000 barrels per day), and the old Port Harcourt plant (60,000 barrels per day).
“These developments underline our commitment to reducing dependency on imported refined products.”
He added that ongoing licensing efforts aimed at expanding domestic refining capacity were ongoing to further support economic growth through job creation and energy security.
The NMDPRA’s recent licensing activities also include approvals for modular refineries in Edo, Delta, and Abia states, expected to add an additional 140,000 barrels per day upon completion.
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