Diversification of Islamic Financial Instruments
46
3.1.4 ISLAMIC CAPITAL MARKETS IN NIGERIA
Islamic Funds
As at 31st December 2016, according to data obtained from the Securities and Exchange
Commission (SEC), the total Net Asset Value (NAV)25 of the two Islamic funds was $7.3 million,
representing only 1.01% of $722 million for the entire mutual funds market as indicated in
table 19 below.
Table 19: Net Asset Value (NAV) of Islamic Funds
Islamic Funds
NAV as at 31st Dec
2016 (Million $)
NAV for All Mutual Funds
(Million $) – 31st Dec
2016
% Islamic
Fund/All
Mutual Funds
Lotus Halal Inv. Fund 6.85
Stanbic IBTC Imaan
Fund
0.48
Total 7.33 722.45 1.01
Source: Extracted from Securities and Exchange Commission website
According to information available on the website of Lotus Capital26 which is the key player in
the Islamic Capital market there are five key products offered by the fund manager as follows:
Halal Fund, Halal Fixed Income Fund, Hajj Plan, Equity Exchange Traded Fund (Equity ETF)
and Nigerian Stock Exchange (NSE) Lotus Islamic Index, NSE LII which was created in 2009
and launched in 2012 as the first index to track the performance of 15 Shariah compliant
equities listed on the NSE.
Sukuk
IFBS defines Sukuk as the holder’s proportionate ownership in an undivided part of an
underlying asset where the holder assumes all rights and obligations to such asset. It is issued
and traded in the Capital market. The first Sukuk issued in Nigeria was the Osun State
Government Ijarah Sukuk issued in 2013. It was a $90 million Ijarah Sukuk27 (14.75 percent)
fixed return tranche 2 which had 42 investors with Lotus Capital Limited as the leading issuing
house and Augusto and co, one of Nigeria’s leading rating agencies, as the rating agent. It was
meant to finance roads and school constructions across the state and is due in 2020.
There is also a plan to issue a hundred billion naira (about $327 million) Sovereign Sukuk in
Nigeria. According to Security and Exchange Commission (SEC), the sovereign Sukuk which
was initially scheduled for third quarter of 2016, later shifted to the first quarter of 2017 and
was further postponed to the end of the second quarter of 2017 is again shifted to a later date.
The main reasons that delayed the issuance of the Sukuk are: (i) capacity building in Debt
Management Office (DMO), an agency of Government responsible for the issuance of the
25 The net asset value of all the mutual fund (Islamic fund and conventional fund) is available at the website of SEC:
26 Details of the products can be obtained from the Lotus Capital website:
27 Details of the Sukuk issued by Osun State Government available at:
completes-n11-4-billion-sukuk-bond-aregbesola-commended-for-exploring-new-development-options/