Abuja, Dec. 7, 2023: Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, says non-interest and equity financing are solutions to the current global debt crisis.
Edun said this at the maiden Securities and Exchange Commission (SEC) and the Islamic Financial Service Board (IFSB) international forum on non-interest capital markets in Abuja on Wednesday.
The minister said that there was need for the country to take advantage of the huge funds and opportunities in the equities and non-interest markets.
He noted that the country also needed to increase her participation in Sukuk.
“What we are saying is creating solution to the crisis of the world currently including the fact that to sustain inclusive growth agenda of President Bola Tinubu, we need to have green projects.
“That is projects funded by equity because as you all know, our debt service ratio overrules our revenue ratio.
“There is need to finance green projects so that it will not just be foreign direct investment,’’ he said.
The Director-General of SEC, Mr Lamido Yuguda, said the forum was focused on strengthening the development of the non-interest finance segment in the country.
Yuguda said that SEC was committed to fostering market development and innovation, maintaining a regulatory framework that ensured stability and fairness.
“In Nigeria, the Islamic finance segment of the financial industry reached an estimated size of 2.9 billion dollars as at the end of 2022, with outstanding sukuk forming the largest part at 57 per cent.
“This is followed by Islamic banks at 42 per cent (total assets), and the remaining one per cent split between Islamic funds (total assets) and takaful (total contributions).
“This shows that the Nigerian market makes up just 0.9 per cent of the global non-interest market, indicating the dire need for more growth,’’ Yuguda said.
The Secretary-General of IFSB, Dr Bello Danbatta, said the future of non-interest capital markets was linked to the theme of the forum.
Danbatta said that the country had what was required to lead the continent through the development of non-interest capital market.
“The country has what it takes to revive our textile industry, education through the non-interest capital market,’’ he said.
Dr Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), represented by Mr Haruna Mustafa, Director, Financial Policy and Regulation of the Bank, said they would work with other stakeholders to evolve and foster development in the sector.
Mr Sunday Thomas, the Commissioner for Insurance, National Insurance Commission (NAICOM), said there was need for the non-interest financing sector to look at sustainable opportunities which insurance offered.
Mr Bello Hassan, the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), called for policy actions that would deepen the non-interest capital market.
The Memorandum of Understanding (MoU) was signed between SEC and IFSB to deepen the market through capacity building.