The Issuance of Retail Sukuks at both Sovereign and Sub-national will go a long way in spurring socio-economic development in Nigeria.
Mr. Attahiru Maccido, A Director with Buraj Capital Limited gave this insight in an interview with WebTVs Islamic Finance Weekly programme.
According to Maccido Retail Sukuks are vital sources of financing for key social projects with wide impact on the populace. Speaking further he said, “Globally, people have clamoured for investment at the bottom of the pyramid, so that smaller enterprises and individuals can gain access to Sukuk and some other asset categories especially the social Sukuk. There is need for social amenities that can be funded by social Sukuk in Nigeria”.
He believed that retail investors can tap into the Sukuk market with the right awareness and investment provisions, so that they can also participate and benefit.
Despite a successful Sukuk Bond issuance by the Federal Government in 2017 and 2018, Maccido noted that the participation of retail investors was low.
The Islamic Finance expert was of the view that Nigeria can learn from Malaysia and Indonesia that have both leveraged “Retail Sukuks”, to achieve key financing of their social projects.
He said Osun state was the only Sub-National that has issued a Sukuk bond and also stressed the fact that other Sub-nationals can benefit from exploring retail Sukuk to address issues like housing, healthcare, education, purpose built markets etc.
Giving further perspective the former CEO of Lotus Financial Services described Nigeria as a market with immense opportunities, for the growth of the Sukuk market which can be achieved by addressing the structural impediments.
Speaking further he cited in February 2019, the Pension Industry’s regulatory body, Pencom’s, revision of the guidelines to all PFAs (Pension Fund Administrators)’s requiring them to hold multiple types of funds based on pension contributor profile.
Among the multi-funds is the non-interest fund which is a compliant non-interest instrument.
“Now that we have about N10trn in the entire pension industry there is need for about 10% or 20% of the money or the instrument worth, to be invested in Non-Interest finance market”.
On the outlook for the Islamic Finance market in Nigeria he called on financial regulatory bodies to address the bottlenecks and explore the standardization of contracts in the industry, he also asked for the creation of increased awareness in the country of the non-interest market.