null Nigerian Islamic Finance Industry Is Nascent but with Growth Potential
Nigerian Islamic Finance Industry Is Nascent but with Growth Potential
26 Jan 2021 | Tuesday Source: Fitch Ratings
The Islamic finance industry in Nigeria remains nascent and in its early stages of development, but there is potential for growth, Fitch Ratings says. This view is based on Nigeria being the most populous country in Africa, with the fifth-largest Muslim population in the world, along with rising government support for the sector and large financing requirements. Outstanding sukuk issuance constitutes the largest segment of Nigeria's Islamic finance market, followed by Islamic banks (by total assets), Islamic funds (by net asset value) and takaful (by total contributions).
Nigeria (B/Stable) has experience in tapping the international bond market. However, the Nigerian sukuk market is restricted to local-currency sovereign issuances. We expect local-currency sukuk issuance to pick up as domestic investor appetite for such instruments is growing and the sovereign continues to seek alternative funding sources, as it faces heavy fiscal pressures due to the lower oil prices and the economic disruption caused by the coronavirus pandemic.