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
Africa-focused fintech company PalmPay has joined the ranks of unicorn startups after attaining a valuation of more than $1 billion, as the digital payment platform prepares for a potential initial public offering (IPO) in Hong Kong.
According to a report by Bloomberg on Tuesday, citing people familiar with the matter, the Hong Kong-headquartered company is in advanced discussions to raise about $200 million in a new funding round that would cement its unicorn status and support its next phase of expansion.
The planned fundraising comes as PalmPay accelerates its growth strategy across Africa and Asia, while positioning itself for a public listing that could become one of the most significant fintech IPOs involving an Africa-focused company in recent years.
PalmPay’s move follows a period of rapid growth in Nigeria, where it has become one of the country’s largest digital financial services providers. Alongside OPay and Moniepoint, the company forms the trio that dominates Nigeria’s retail digital payments and agency banking market, a segment driven by millions of point-of-sale (POS) transactions processed daily.
With PalmPay’s latest valuation milestone, all three leading Nigerian fintechs have now achieved unicorn status. While OPay has previously disclosed plans to pursue a listing in the United States, Moniepoint has remained focused on expanding its banking and business services without publicly indicating IPO ambitions.
Founded in 2019 after securing a Mobile Money Operator (MMO) licence from the Central Bank of Nigeria (CBN), PalmPay has built one of the country’s fastest-growing fintech ecosystems. The company says it now serves more than 35 million registered users and over 600,000 merchants, supported by an extensive network of more than 500,000 mobile money agents nationwide.
The platform offers a broad suite of financial services, including peer-to-peer transfers, bill payments, airtime purchases, savings, credit products, merchant payment solutions and agency banking services. PalmPay says it processes as many as 15 million transactions daily, reflecting the increasing adoption of digital payments across Nigeria.
Beyond its home market, the fintech has expanded into Tanzania, Ghana, and Bangladesh, underscoring its ambition to become a leading emerging-market digital bank. Industry analysts view the expansion as part of a broader strategy to diversify revenue streams while replicating its Nigerian success in other underbanked markets.
PalmPay has attracted backing from prominent global investors, including Taiwanese semiconductor manufacturer MediaTek and smartphone maker Transsion Holdings, whose Tecno, Infinix and itel brands command significant market share across Africa. Their support has helped PalmPay leverage smartphone penetration to drive financial inclusion through mobile-first banking services.
As part of efforts to strengthen its leadership ahead of its next growth phase, PalmPay recently appointed Mr Samuel Oluyemi as Chief Operating Officer (COO) for its Nigerian business. Mr Oluyemi joined the company after more than two decades at the Nigeria Inter-Bank Settlement System (NIBSS), where he played key roles in developing the country’s digital payments infrastructure.
If completed, the fundraising and eventual Hong Kong listing would further underscore growing international investor confidence in African fintech companies despite a more cautious global venture capital environment. The proceeds are expected to support PalmPay’s geographical expansion, deepen its product offerings, invest in technology infrastructure and strengthen its competitive position in Africa’s rapidly evolving digital financial services industry.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
