IslamicFinance.de

It seems that the National Insurance Commission (NAICOM) set an agreement with a German agency, GIZ, to conduct a study of micro and Takaful (Islamic) insurance products in Nigeria. The statement came from Mr. Fola Daniel, NAICOM Commissioner for Insurance.
He added that the gesture is part of NAICOM’s drive to open up and expand insurance market at the grassroots and that this was also a way to increase the sector’s contribution to the nation’s Gross Domestic Product (GDP).

Changes are planned in the financial regulations of Senegal, Kenya, Nigeria and South Africa. These will permit a launch of Sukuk and are allocated to deliver a rebound in the international Sukuk market, a market that has been declining since 2008.
The latest Global Sukuk Market report released by the International Islamic Financial Market (IIFM) shows that Africa accounted for only 0.3% of global Sukuk launches in the decade ending December 2010, all of which came from Sudan with some miniscule activity in The Gambia.
The report also adds that issuance trend displays that Islamic countries will continue to be the main drivers of the Sukuk market in the coming years while others from Europe, Africa, Central Asian Republics and the Far East may join if they see opportunity and advantage in issuing Sukuk.

Bahraini group is helping universities begin courses in Sharia-compliant business practices to avoid a shortage of experts in the US$1 trillion (Dh3.67tn) market.
Khairul Nizam, the deputy secretary general of the Accounting and Auditing Organisation for Islamic Financial Institutions, stated that the industry will need 15 % more personnel over the next five years and 25 % more in a decade.
Countries like Nigeria, Thailand, Australia and France plan to present legislation to facilitate Islamic financing, moves that will increase demand for scholars to certify that the products meet requirements on no interest payments.

It seems that Nigeria has turn into a battleground for Islamic finance. Some lines from the recent newspapers are:
Islamic Banking: Muslims Ready to go to War
Islamic Banking: Insult to Nigeria — Cleric
Stop Islamic Banking in Nigeria
Christian groups oppose establishment of Islamic Banking
Islamic Banking: Christian groups may apply for own licence

Standard Bank wants to begin haria-compliant banking in Nigeria this year to benefit from the needs of Africa’s largest Muslim population.
The west African country has as competitors Senegal, Egypt and South Africa, all looking to expand in the $1 trillion (R7.1 trillion) Islamic finance industry.
Central bank governor Lamido Sanusi stated in June that Nigeria wanted to be a “hub” for sharia-compliant finance in the region and planned to sell its first sukuk, or Islamic bond, within 18 months.

Path Solutions stated that Jaiz International Bank has chosen iMAL to achieve growth objectives and future plans. Jaiz International Bank is the first licensed Islamic bank in Nigeria. The bank's offer would be corporate banking, housing finance, car finance, retail banking products as well as other services that conform with the tenets of Islam.
The new agreement underlines the leading position of Path Solutions in the nascent West African Islamic banking market.

Engr. Mansur Ahmed, Director General of the Infrastructure Concession Regulatory Commission, points out that critical imperatives for the successful issuance of Sukuk in Nigeria will include the right regulatory and taxation framework, transparent transaction structure, credit rating, marketing, risk and mitigation measures, appropriate technical capacity and guarantees.
On the other hand, Nigerian newspaper Vanguard reports the West African Institute for Financial and Economic Management (WAIFEM) as saying Nigeria stands to benefit from over $1.4 trillion worth of assets being controlled by Islamic banks all over the world if the nation adopts the banking model.

The Central Bank of Nigeria launched on 21st June 2011 new guidelines for the regulation and supervision of institutions offering non-interest financial services in Nigeria.
It seems that these guidelines are issued pursuant to the non- interest banking regime.
Moreover, the guideline makes sure that there shall be compliance with prescribed Audit, Accounting and Disclosure Requirement such as the Nigerian Accounting Standards Board (NASB) and that where there is a conflict between the local and international standards, the provisions of the local standards issued by NASB shall apply to the extent of the inconsistency.

Beginning with 2002, Jaiz has become synonyms with non interest banking in Nigeria. But it seems that Jaiz is not the first institution that was proposed as Islamic Bank before it there were many attempts, starting with WAPA (West African Pilgrimage Agency) of the colonial era.
Since that CBN directive little was heard about Jaiz, the few moves made by it organizers to raise the new minimum capital are never completed, this included looking for foreign investors and multilateral corporations to come and invest in the Bank.

Islamic finance is playing each day goes by an even more important role in today’s global financial village.
Operators of Islamic banking disputed tha fact that Islamic banking cannot be fully Sharia based unless there is Takaful to take care of their insurance businesses.
Mallam Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria, stated that Nigeria is the most populous black nation in the world with a population of about 150 million, boasts of a significant Muslim population, majority of whom yearn for such financial services.

Stanbic IBTC Bank Plc (IBTCCB) was finally given approval by Nigeria’s central bank to provide Islamic banking services in Africa’s most populous nation.
Nigeria’s 150 million population is divided in an almost even way between Muslims and Christians, providing it with a market for Islamic banking products. The oppinion of Central bank Governor Lamido Sanusi ist that Nigeria wants to be a “hub of Islamic finance” in the region and plans to sell its first sukuk within 18 months.

Jaiz is widely associated with non-interest banking in Nigeria. The bank has begun its activity in 2002 when the movement for the creation of Jaiz gathered momentous.
Before Jaiz there were many other attempts: starting with WAPA (West African Pilgrimage Agency), which was established during the colonial era to cater for the financial arrangements of Muslim pilgrimage, a name that is still common in places like Kano; to Habib Bank and numerous community and later micro finance Banks established for the same purpose.
But Jaiz is special because of the scale of the project and the hope that is place on the institution by millions of people among them ordinary investors who put their hard earn savings in the institution.

A draft framework for non-interest banking was issued in March 2009 by the Central Bank of Nigeria (CBN). Inspite of this, its position on Islamic banking did not become much of an issue until a few months ago when the final guidelines were released.
D.A. Eke, acting director of banking supervision at the CBN, stated that the objective of the framework is to provide minimum standards for the operation of non-interest banking in Nigeria while serving as an exposure for comments, suggestions and/or inputs by stakeholders. The problem is that suggestions and/or inputs from stakeholders never came.

Mary Robinson, Ireland’s first female president, has called on organisations and companies to leverage on CSR for improved growth and development of emerging economies like Nigeria’s. Her actions are sustained by the fact that she describes Corporate Social Responsibility (CSR) as a key driver to the future of the African economy.
She added that the emerging business environment in Nigeria is the one to look out for in the future of the emerging economies.

Nigeria plans to launch its first sovereign Sukuk within the next 18 months in an attempted move at boosting Islamic banking in West Africa's largest economy. The was no statement about how much sukuk will be issued.

The Central Bank Governor, Malam Sanusi Lamido Sanusi has the strong oppinion that Nigeria has the potential to become Africa’s Islamic banking hub. According to him, the present economic reforms and favorable ranking by global rating institutions, have improved Nigeria’s profile as a viable investment destination.
The News Agency of Nigeria (NAN) reports that Islamic banking is a financial system that is based on adherence to the Shariah or Islamic law.

Ken Egbas is the Managing Partner TruContact. TruContact is considered by many one of Nigeria’s leading Public relations agencies. He also developed the Social Enterprise and Reports (SERA awards).
In an interview given to Saturday Vanguard Business, Egbas underlines his belief that private organisations should be deeply involved in corporate social responsibility in any environment they operate.

Because of the the new guideline on Non-Interest Financial Institutions (NIFI) by the Central Bank of Nigeria (CBN) a big legal battle is going to take place.
The guideline was signed by the Acting Director, Financial Policy and Regulation Department of the apex bank, Chris.O. Chukwu and became operational on January 13, 2011. It introduced religion into Nigerian banking, although it was forbidden by the Banks and Other Financial Institutions Act 1991. Four Senior Advocates of Nigeria (SAN) have been engaged by some Nigerians to fight the new guideline at the Federal High Court, Abuja.

Background
The current size of the Islamic Banking Industry at the global level is $1 trillion, and could grow to $5 trillion over time.
Nigeria is inclined to this global trend. In March 2011 the country has signed an agreement with Malaysia's Central Bank to cooperate in Islamic Financial Service1.
Principles of Islamic Finance
The most important principles of Islamic Finance involve the forbiddance of:
- interest earnings, money lending or usury (riba)
- sinful activity (haram), such as direct or indirect association with lines of business involving alcohol, pork products, firearms, tobacco, and pornography
- speculation, betting, and gambling (maisir), including the speculative trade or exchange of money for debt without an underlying asset transfer
- trading of the same object between buyer and seller
Conclusion

The attenders at the Islamic Financial Services Board (IFSB) will be, among others, central bank governors, representatives from Bahrain, the UAE, Jordan, Malaysia, Nigeria, and Bahrain, and many international finance and economic experts.
The host of the conference will be the Central Bank of Luxembourg and the theme is "Enhancing Global Financial Stability. Challenges and Opportunities for Islamic Finance".