Economy
SEC Vows to Make Islamic Capital Market Attractive in Nigeria
By Dipo Olowookere
Those who wish to explore the Islamic capital market in Nigeria have been assured of an attractive enabling environment by the Securities and Exchange Commission (SEC).
According to the Director-General of SEC, Mr Lamido Yuguda, efforts are being made to work with relevant stakeholders to implement recommendations for the non-interest capital market sector in line with the objectives of the 10-year Nigerian Capital Market Master plan (2015-2025), which include developing the segment of the market to contribute at least 25 per cent of the overall capital market capitalisation by 2025, with Sukuk contributing 15 per cent of outstanding bond issuances.
Mr Yuguda, who spoke at the 2021 African International Conference on Islamic Finance held in Abuja on Wednesday, stated that Islamic finance instruments are globally recognized as acceptable securities, with less Value-at-Risk due to their asset-based and project-tied investment features.
He noted that due to this, the sector offers financial products that are safe, competitive and attractive, adding that many jurisdictions have realised the potentials in Islamic finance and have positioned themselves to tap the potential benefit of such financing.
“It is noteworthy that since Islamic finance heavily relies on the Islamic capital market (ICM) as an investable outlet, products such as Sukuk (Islamic bond), Islamic REITs (I-REITS), Islamic Funds (I-Funds) and Exchange-mirrored Traded Funds (Islamic Equity Index) could all be offered for the purpose of financing infrastructure,” the SEC chief, who was represented by the Executive Commissioner Corporate Services SEC, Mr Ibrahim Boyi, submitted.
At the event themed Infrastructure Financing, Sustainability, and the Future of African Markets 2.0, he further stated that, “Sukuk issuances are increasingly gaining significance as a veritable mode of infrastructure financing.
“Consequently, a number of countries in the Sub-Saharan region of the continent; Sudan, Gambia, Senegal, South Africa, Ivory Coast, Nigeria, Mali, and Togo, have issued sovereign Sukuks to finance infrastructure.”
“For example, we have reviewed existing regulatory frameworks and introduced new ones. In particular, we issued rules on Islamic Fund Management as well as on Sukuk issuance.
“These two legal frameworks have encouraged Islamic product innovation with the registration of ten ethical/shariah compliant funds and the issuance of Nigeria’s sub-national Ijara Sukuk by the Osun State government in 2013, which was oversubscribed.
“Also, the federal government, through the Debt Management Office (DMO) has so far issued Ijara Sukuk in excess of N350 billion within the last 3 years. The funds were used to construct and rehabilitate infrastructure development projects across the six geo-political zones of the country.”
He noted that the agency recently approved a N30 billion corporate Sukuk programme and a N10 billion series issuance under the programme. This marks the first corporate Sukuk issuance to the public; commendably, the proceeds are to be used to finance housing infrastructure.
Similar to the sovereign issuances, the corporate issuance was also oversubscribed. The issuance was a landmark in the Market and we are confident that more corporates will begin to access the market.
According to him, the theme of this year’s conference resonates with a core function of the capital market as the market plays a crucial role in enabling access to medium and long term financing which is better suited to infrastructural development.
“According to the AfDB, Africa requires an annual investment of between $130 and $170 billion annually in infrastructure to reduce its infrastructure deficit. While according to the Global Infrastructure Hub (2020), Africa required an infrastructure investment of $184.03 billion in 2019 and $190.1 billion in 2020 to close its infrastructure deficits.
“The African continent continues to be challenged by deficits in infrastructure with governments being the major financier of infrastructure. Regrettably, governments’ efforts to finance the sector is constrained by large deficits in the budget, rising public debt and debt sustainability concerns,” he said.
He disclosed that the commission was also considering modalities to constitute a Sharia Advisory Council as a body of experts to advise the SEC and the market on non-interest products and their applications.
“Going forward, our focus will be on public enlightenment to encourage sub-national and corporate issuances and stronger capacity building initiatives. This is what informed the idea of hosting 3 webinars on non-interest capital market products in 2021 and more will be organised next year.
“We hope that the State governments represented here will take advantage of this important opportunity to familiarize themselves with the kind of products that can be issued and how to leverage this exciting area of finance to better the lives of our citizens.”
He reiterated the SEC’s commitment to continue to identify ways of using Non-Interest capital market products such as Sukuk as a tool for financing infrastructural development.
“We are committed to facilitating the growth of the non-interest capital market segment through innovation whilst ensuring a fair, efficient and transparent market.
“We will continue to put in place clear and consistently applied regulatory frameworks and reduce regulatory and operational impediments to engender the smooth functioning of the market,” he added.
By Adedapo Adesanya
Nigeria’s gross reserves declined by $1.2 billion month-to-month to $37.2 billion at the end of June 2025, the Central Bank of Nigeria (CBN) latest data on gross official reserves shows.
The gross reserves has dropped in five months in the six months on record, excluding a brief uptick in May 2025, when it increased by approximately $515 million.
The gross official reserves have steadily declined since January 2025, with May being the sole exemption.
Year-to-date, the reserves have declined by around $3.7 billion, driven by the CBN’s interventions in the foreign exchange (FX) market and the repayment of external debt obligations.
Recent data from early July indicates a slight improvement, primarily attributed to enhanced foreign portfolio investment (FPI) inflows; however, the trajectory of reserves remains susceptible to external headwinds.
The reduced FX demand pressures, particularly due to a slowdown in import trade-related outflows are also expected to provide support.
Also, there are early signs that import-related FX demand is beginning to recover in the past few days.
The Naira appreciated by 3.5 per cent in June 2025, to close at N1,532.0 per Dollar at the official window driven by improved market sentiment, the data showed.
The Naira currently trades below N1,530 per Dollar, closing at N1,529/$1 on Thursday.
Despite some early signs of recovery in July, Nigeria’s external reserves continue to face headwinds from fragile oil market fundamentals, uncertain supply dynamics from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+), and weaker-than-expected global growth prospects.
This week, a CardinalStone Research note projected that Nigeria’s foreign exchange reserves will close the year at around $41 billion.
In its newly released mid-year economic outlook, the Lagos-based research and investment advisory firm attributed the anticipated reserve growth to planned external loans worth $3.2 billion, which the Federal Government aims to secure in the second half of 2025 to meet fiscal obligations.
It added that additional capital inflows from portfolio investors are also expected to support the balance and push reserves above the $37.2 billion recorded at the end of June.
According to the firm, a stronger reserve position should help the Naira trade within the N1,550 to N1,635 per US Dollar range until the end of 2025, providing relief to businesses and foreign investors monitoring currency stability.
By Adedapo Adesanya
The chief executive of the Nigerian National Petroleum Company (NNPC) Limited, Mr Bashir Bayo Ojulari, has hinted at the possibility of selling off the country’s refineries.
In an interview with Bloomberg on Thursday, Mr Ojulari said the NNPC was currently reassessing the refineries’ strategies and could finalise the review by year-end.
The NNPC boss spoke to the news platform on the sidelines of the 9th OPEC international seminar in Vienna, Austria, admitting that it was becoming a ‘bit more’ complicated to revamp state-owned refineries.
Nigeria has four crude oil refineries, all managed by the NNPC Limited. These oil facilities have long struggled with underperformance, inefficiency, and maintenance issues.
There have been increased calls over the years to hand these refineries located in Port Harcourt, Warri, and Kaduna to the private sector for efficient management and productivity.
Recall that in November 2024, the state oil refinery said the Port Harcourt refinery had officially commenced crude oil processing, but the refinery shut down in May for maintenance.
The Warri and Kaduna refineries are, however, still undergoing rehabilitation.
“So, refineries, we made quite a lot of investment over the last several years and brought in a lot of technologies. We’ve been challenged,” he said.
“Some of those technologies have not worked as we expected so far. But also, as you know, when you’re refining a very old refinery that has been abandoned for some time, what we’re finding is that it’s becoming a little bit more complicated.
“So, we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently,” he added.
However, Mr Ojulari said NNPC remains uncertain whether the review will result in the sale of the refineries.
“But what we’re saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now,” he said.
By Adedapo Adesanya
The Minister of Steel, Mr Shuaibu Audu, says Nigeria is weighing measures to cut loses totalling $4 billion annually in foreign exchange (FX) to imported steel products.
He disclosed this during a press conference on Thursday to announce the maiden National Steel Summit coming up on July 15, 2025, assuring Nigerians that before the expiration of the first term of President Bola Tinubu’s administration, the first section of the Ajaokuta Steel Plant should kickstart operation.
He stated that President Tinubu has been actively working to ensure the utilisation of the abundant raw steel materials in Nigeria and the emergence of a steel sector in the country.
Private players like Africa’s richest man, Mr Aliko Dangote, had initially planned to foray into steel manufacturing, but abandoned plans to enter Nigeria’s steel industry after he said he was facing allegations of increased monopoly in Nigeria’s core sectors. He already has interests in food, energy, and cement sectors.
Mr Dangote earlier set his sights on the Nigerian steel market as a possible venture in the future after successful inputs in food, cement, and energy.
But last year, the billionaire businessman explained that the company’s board decided to avoid the steel industry to prevent accusations of attempting to monopolize it
“About doing a new business which we announced, that is the steel, our board has decided that we shouldn’t do the steel because if we do the steel business, we will be called all sorts of names like monopoly, and imports will be encouraged. So we don’t want to go into that,” he said during an interview at the Afreximbank Afro-Caribbean Trade & Investment Forum in Nassau, The Bahamas, in June 2024.
Mr Dangote called on other Nigerians to invest in the industry to help boost the country’s economy.
Despite the local material wealth, 70 per cent of Nigeria’s yearly steel demand of around 10 million metric tonnes is imported.
Nigeria spends the $4 billion on steel imports annually despite having around 74 steel plants and fabricators across the country, according to the Ministry of Steel Development.
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