{"id":7275,"date":"2026-02-06T11:02:35","date_gmt":"2026-02-06T11:02:35","guid":{"rendered":"https:\/\/ograsset.com\/?p=7275"},"modified":"2026-02-06T11:02:36","modified_gmt":"2026-02-06T11:02:36","slug":"calls-grow-for-bigger-sukuk-to-fund-infrastructure","status":"publish","type":"post","link":"https:\/\/ograsset.com\/index.php\/2026\/02\/06\/calls-grow-for-bigger-sukuk-to-fund-infrastructure\/","title":{"rendered":"Calls grow for bigger Sukuk to fund infrastructure"},"content":{"rendered":"\n
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Calls grow for bigger Sukuk to fund infrastructure<\/strong><\/p>\n\n\n\n

Experts in Nigeria\u2019s non-interest finance space have called for larger and more frequent Sukuk issuances to deepen the market, unlock long-term capital for infrastructure, and widen financial inclusion, as volatility in global markets pushes investors towards asset-backed and ethical instruments.<\/p>\n\n\n\n

The call dominated discussions at the CFG Africa Non-Interest Investment Forum held in Abuja on Thursday by CFG Africa, the investment group formed from the merger of Maynard Partners and Concreed Capital.<\/p>\n\n\n\n

Speaking on the sidelines of the forum, the Managing Director and Chief Executive Officer of CFG Africa, Babajide Lawani, said the group had deliberately positioned itself in the non-interest space to develop products that align with ethical and faith-based investment preferences while delivering competitive returns.<\/p>\n\n\n\n

\u201cBeyond the services we offer, we are quite open-minded and intellectually curious,\u201d Lawani said. \u201cWe do not like to chase the traditional things other markets will do, and it is one of the reasons why we have intentionally entered the non-interest space. We think we can bring new things to that market and new products that can support investors with that orientation.\u201d<\/p>\n\n\n\n

He explained that CFG Africa, which operates across asset management, investment banking, advisory, and trusteeship, had recorded strong growth over its five to six years of operation, expanding \u201cin multiples on an annual basis\u201d on the back of client confidence and deep market participation.<\/p>\n\n\n\n

According to him, non-interest finance offers Nigeria an opportunity to draw new pools of capital into the economy by accommodating investors who, for faith-based reasons, avoid conventional interest-bearing instruments.<\/p>\n\n\n\n

\u201cThe non-interest space can drive inclusion. There are people who believe, because of their faith, they should not invest in certain traditional investments,\u201d he said. \u201cBy carving out this space, you expand investable funds around Nigeria and allow people to live a wholesome life, investing according to their orientation without feeling they are losing out.\u201d<\/p>\n\n\n\n

Lawani said the forum was convened to signal CFG Africa\u2019s long-term commitment to the sector and to engage stakeholders on the future of non-interest finance, as the group prepares to roll out additional products following the launch of its first ethical fund.<\/p>\n\n\n\n

In his keynote address, the Chief Executive of TrustArthur and President of the Non-Interest Financial Institutions Association of Nigeria, Dr Basheer Oshodi, argued that global economic uncertainty, rising geopolitical risks, and shifting investment flows had strengthened the case for asset-backed instruments such as Sukuk.<\/p>\n\n\n\n

\u201cGold has appreciated by between 60 and 80 per cent in recent years, and almost 20 per cent this year alone,\u201d he said, noting that investors were diversifying away from unpredictable global markets. \u201cYou can no longer predict global economics and global politics, so there is a shift into other asset classes.\u201d<\/p>\n\n\n\n

Oshodi pointed to Nigeria\u2019s recent market performance, including the oversubscription of sovereign issuances, as evidence of strong appetite for well-structured instruments.<\/p>\n\n\n\n

He said the last 10-year Ijarah Sukuk was oversubscribed by about 735 per cent, mirroring strong demand seen in Eurobond issuances.<\/p>\n\n\n\n

\u201cThe Sukuk market is not doing badly at all,\u201d he said. \u201cBut once-a-year issuance is not enough. We should be issuing at least quarterly, and the size should be much bigger. People will still oversubscribe.\u201d<\/p>\n\n\n\n

He stressed that deeper and more frequent issuances would allow fund managers to create secondary instruments, improve liquidity and support the financing of infrastructure at scale.<\/p>\n\n\n\n

Oshodi also highlighted structural gaps in Nigeria\u2019s non-interest ecosystem, noting that the combined assets of the sector remained smaller than those of a few digitally enabled microfinance banks.<\/p>\n\n\n\n

\u201cThree digital microfinance banks have assets bigger than the entire non-interest banking market put together,\u201d he said. \u201cThese gaps are opportunities. Technology is the growth driver, and it has to be now.\u201d<\/p>\n\n\n\n

He argued that growth would depend on building assets for those at the bottom of the pyramid through MSME-focused funds and digitally delivered products.<\/p>\n\n\n\n

\u201cWe have over 120 million Nigerians at the bottom of the pyramid. They want small amounts for small trades, and because there are many of them, you can build very large portfolios,\u201d he said.<\/p>\n\n\n\n

On regulation, Oshodi commended the Central Bank of Nigeria and the Debt Management Office for their support, urging the DMO to increase the frequency and size of Sukuk issuances and to reserve a portion specifically for non-interest financial institutions.<\/p>\n\n\n\n

\u201cRight now, conventional institutions take almost everything,\u201d he said. \u201cWe need deliberate allocation to grow this market.\u201d<\/p>\n\n\n\n

He also called for creative approaches to attracting foreign capital through Sukuk structures backed by viable assets, arguing that underwriting and guarantees could draw global investors without exposing Nigeria to excessive fiscal risk.<\/p>\n\n\n\n

On a panel session, the Group Head, Compliance at Lotus Bank, Dr Ameenah Adebayo-Shittu, clarified the distinction between ethical finance and Shariah-compliant investments. \u201cAll Shariah-compliant investments are ethical, but not all ethical investments are Shariah-compliant,\u201d she said. \u201cThe key difference is the prohibition of riba, which is interest.\u201d<\/p>\n\n\n\n

She dismissed perceptions that Shariah-based products are less profitable, citing strong global and local performance. \u201cIn 2025, Shariah-compliant US equity funds delivered between 14 and 16 per cent returns, and in Nigeria, Sukuk has been oversubscribed many times,\u201d she said.<\/p>\n\n\n\n

Adebayo-Shittu said non-interest finance could support economic growth by enforcing discipline through asset-backed financing. \u201cWe do not trade cash. We pay the vendor, not the borrower directly, so funds are tied to real economic activity,\u201d she said, adding that such structures reduce diversion of funds and support sustainable business growth.<\/p>\n\n\n\n

She noted that Shariah-compliant financing could also lower borrowing costs for the government because returns are based on profit-sharing rather than predetermined interest.<\/p>\n\n\n\n

Also speaking, the Head of Asset Management and Managing Director of CFG Africa Trustees, Akindele Ogundepo, said the CFG Ethical Fund was designed to address the shortage of investment options in the non-interest space and promote inclusion.<\/p>\n\n\n\n

\u201cThe fund allows investors to participate in federal and state government Sukuk, Islamic investments, and ethical stocks, all pooled into one product,\u201d he said. \u201cWe brought one million units to the market at N1,000 per unit, and the fund is doing very well.\u201d<\/p>\n\n\n\n

Ogundepo said the initiative reflected CFG Africa\u2019s broader financial literacy and inclusion philosophy, adding that more products would be introduced as collaboration within the ecosystem deepens.<\/p>\n\n\n\n

As discussions concluded, speakers agreed that expanding Nigeria\u2019s Sukuk market through larger, more frequent issuances, combined with digital innovation and MSME-focused assets, would be critical to unlocking long-term capital and positioning non-interest finance as a mainstream pillar of the economy.<\/p>\n\n\n\n

The PUNCH earlier in May 2025 reported that Series VII of the Sovereign Sukuk of the Federal Government recorded an unprecedented subscription level of over N2.21tn, representing an oversubscription of 735 per cent.<\/p>\n\n\n\n

This was revealed by the Debt Management Office, indicating that it offered N300bn on behalf of the Federal Government of Nigeria and recorded the feat.<\/p>\n\n\n\n

Source:<\/em> https:\/\/punchng.com\/calls-grow-for-bigger-sukuk-to-fund-infrastructure\/<\/em><\/a><\/em><\/p>\n\n\n\n

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Calls grow for bigger Sukuk to fund infrastructure Experts in Nigeria\u2019s non-interest finance space have called for larger and more frequent Sukuk issuances to deepen the market, unlock long-term capital for infrastructure, and widen financial inclusion, as volatility in global markets pushes investors towards asset-backed and ethical instruments. The call dominated discussions at the CFG… <\/p>\n

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