Nigeria: SEC Boosts Islamic Finance for Growth & Inclusion

The Rise of Non-Interest Finance in Nigeria

Nigeria’s non-interest capital market has experienced remarkable expansion, currently valued at over N1.6 trillion. Sukuk bonds, Islamic financial certificates, have emerged as the dominant instrument driving this growth. The recent oversubscription of the latest Sukuk issuance – a staggering 700% – vividly demonstrates the burgeoning investor confidence in ethical financial alternatives.

This momentum is further bolstered by the recently enacted Investments and Securities Act 2025, which provides a robust legal framework for innovation within the capital market. Dr. Agama highlighted the Act as a “game-changer,” empowering the SEC to register non-interest collective investment schemes and directly support the Masterplan’s objectives of market development and innovation.

The upcoming AICIF conference will concentrate on unlocking capital for critical sectors, including infrastructure development, sustainable energy investments, and agricultural financing. A key focus will be the integration of financial technology (fintech) to broaden the reach and accessibility of Islamic finance. Promoting financial inclusion, ensuring equitable access to financial services for all segments of the population, will be a central theme throughout the discussions.

The SEC anticipates the conference will yield actionable strategies to stimulate investment, foster product development, and inform future regulatory policies. Collaboration will be paramount, aiming to harmonize policies and create innovative financial solutions tailored to the unique needs of emerging African economies.

Strategic Partnerships and Industry Collaboration

Mrs. Ummahani Amin, Managing Partner of Metropolitan Law Firm and Chairman of the AICIF 2025 Planning Committee, underscored the conference’s significance as a leading platform for advancing ethical finance across Africa. She lauded the collaborative spirit between the SEC and the AICIF organizing committee, viewing it as a strong indicator of shared commitment to building trust and fostering innovation within Nigeria’s expanding Islamic finance sector.

This year’s conference will feature a diverse program of policy dialogues, technical discussions, and panel sessions, all geared towards exploring how non-interest financial instruments can effectively fund infrastructure projects and stimulate growth in the real sector. Islamic finance, recognized as one of the fastest-growing segments of the global financial system, offers a unique opportunity to shape the continent’s financial future.

The event will also serve as a platform to recognize excellence and showcase innovative solutions that are reshaping the financial landscape across Africa. The SEC and organizers are united in their vision of AICIF as a catalyst for generating actionable strategies and providing renewed momentum for Islamic finance as Africa pursues sustainable growth and economic diversification.

Further solidifying this commitment, the Central Bank of Nigeria (CBN) introduced three new instruments in May 2025 to deepen the country’s non-interest financial market and enhance liquidity management for Islamic financial institutions. The CBN’s circular, issued on May 23, 2025, reflects a broader strategy to strengthen the adoption and operational efficiency of non-interest banking within Nigeria’s financial system.

With the SEC, CBN, and private sector stakeholders aligning their efforts, experts predict that Islamic finance could become a cornerstone of inclusive economic growth, ethical investing, and infrastructure development not only in Nigeria but throughout the African continent. But what role will international investors play in this burgeoning market, and how can Nigeria ensure a level playing field for both domestic and foreign participation?

Considering the potential for growth, how can fintech solutions be best leveraged to reach underserved populations and promote financial inclusion within the Islamic finance framework?

Frequently Asked Questions About Islamic Finance in Nigeria

• What is Islamic finance and how does it differ from conventional finance? Islamic finance adheres to Sharia law, prohibiting interest (riba) and emphasizing ethical investments, risk-sharing, and social responsibility. Conventional finance typically relies on interest-based transactions.
• What are Sukuk bonds and how do they work? Sukuk bonds are Islamic financial certificates that represent ownership in an underlying asset. They provide investors with a return based on the asset’s performance rather than fixed interest payments.
• How does the Investments and Securities Act 2025 support Islamic finance in Nigeria? The Act provides a robust legal framework for Sukuk and other non-interest financial instruments, empowering the SEC to register non-interest collective investment schemes and promote market innovation.
• What role does fintech play in expanding access to Islamic finance? Fintech solutions can leverage technology to reduce costs, improve efficiency, and broaden the reach of Islamic financial products and services, particularly to underserved populations.
• What is the primary goal of the 7th African International Conference on Islamic Finance (AICIF)? The AICIF aims to foster collaboration, harmonize policies, and create innovative financial solutions that address the unique needs of emerging African economies while promoting financial inclusion.
• How is the Central Bank of Nigeria (CBN) supporting the growth of non-interest finance? The CBN has introduced new instruments to deepen the non-interest financial market and enhance liquidity management for Islamic financial institutions, demonstrating its commitment to the sector’s development.