Capital Market Operator Urges FG to Address Infrastructure Challenges with ‘Sukuk’

A capital market operator has urged the Federal Government to float a sovereign “Sukuk” - Islamic Financial Certificate - to tap into the international market to raise funds to address infrastructure challenges.

Hajara Adeola, Managing Director, Lotus Capital Ltd., made the assertion on Wednesday when she spoke at the two-day workshop on the Nigerian Debt Capital Markets in Lagos.

The workshop was organised by FMDQ OTC and the Securities and Exchange Commission (SEC).

Sukuk is an Islamic financial certificate, similar to a bond in Western finance that complies with Sharia, the Islamic religious law.

Mrs Adeola said that sovereign Sukuk was critical to the development of the Nigeria non-interest capital market.

“We need policy direction and the political will to make this happen in Nigeria. Nigeria has not issued sovereign Sukuk and we need to tap into the global market to raise funds for infrastructure development following drop in oil revenue,’’ she stated.

Mrs Adeola said that government needed funds to plough into critical sectors of the economy to achieve the desired growth.

She added that the country needed other product varieties to raise capital because banks were struggling to meet liquidity.

The managing director said that sovereign Sukuk issuance would create a benchmark for private sector to follow.

Mrs Adeola said that global asset of non-interest stood at 2.4 trillion dollars with African contributing only three per cent.

Speaking on the theme: “Non-Interest Finance and Debt Capital Markets: An Overview’’, she said that challenges of non-interest bond in Nigeria were understanding and poor awareness.

Mrs Adeola said that operators would deepen enlightenment campaign to increase the product’s awareness in the country.

“We need more awareness because it is for everybody and not for few individuals,’’ she added.

She commended SEC for encouraging the development of non-interest finance (NIF) in the country.