IslamicFinance.de

In Nigeria, the practice of Islamic finance was introduced in 1992 by the former Habib Bank (Bank PHB, and now Keystone Bank). The profile of this type of banking was again raised between 2008 and 2009 when Nigeria joined the Islamic Financial Services Board (IFSB). Later, the CBN issued framework dated January 13, 2011 to regulate Islamic finance in Nigeria. In July, 2011 the CBN granted licence to Stanbic IBTC Bank to operate an Islamic banking window and subsequently to Sterling Bank in 2013; the CBN had earlier granted approval for the establishment of Jaiz Bank to operate as the first full-fledged Islamic bank in Nigeria. In sum, for Nigeria to benefit from Islamic finance, the governing laws and regulations must be written and subject to interpretation and analysis.

Jaiz Bank has increased its investment portfolios by N7.5bn within the last two years. The investments represent an increase of 380 per cent from the N1.9bn in January 2012 to the current N9.4bn. In terms of profitability, the bank grew its total earnings by more than 750 per cent during the year. Jaiz has expanded its operation from just 3 branches to 13 branches since 2012. It plans to operate in every state capital of Nigeria before the fifth year of operation. In December, 2013, the bank submitted its application for a National Banking License to the Central Bank of Nigeria. Hopes are that this will come through before the end of the second quarter.

While suspended governor of the Central Bank of Nigeria, Lamido Sanusi, is trying very hard to clear his name from the indictment of financial recklessness by the Financial Reporting Council of Nigeria (FRCN) and the presidency, his colleagues appear to be gradually distancing themselves from actions taken during his reign at the regulatory bank. A deputy governor at the bank and once a leading contender to replace Mr Sanusi, Kingsley Moghalu, said that his boss overstepped his authority. Mr. Sanusi, however, said that he believed that his suspension was hastened after he threatened to commission a special audit of all Nigerian banks to unravel the whereabouts of the missing $20 billion. Ironically, the FRCN report also indicted that Mr Moghalu and his colleagues were also recommended for dismissal and prosecution.

Nigerian President Goodluck Jonathan has suspended the governor of the country’s central bank, Mr. Lamido Sanusi, on charges of “financial recklessness and misconduct” and “far-reaching irregularities.” The dismissal followed by days Sanusi’s claim that $20 billion in oil revenues was missing from government accounts. The president’s insistence that the move had nothing to do with Sanusi’s whistleblowing is not convincing. An investigation 18 months ago reportedly concluded that tens of billions of dollars in oil and gas revenue was missing from 2002 to 2012. No investigation followed up on these allegations and no prosecutions resulted. Not surprisingly, there has been an outflow of currency since the dismissal of Sanusi and a sharp plunge in the value of the national currency.

The investment management firm Lotus Capital Limited has been honoured as the best in Africa by the Islamic Finance News (IFN). Lotus Capital won the Africa Deal of the Year Award as the lead issuing house for the N11.4 billion Osun state sukuk issue, which was listed on the Nigerian Stock Exchange (NSE) in September 2013. The issue was oversubscribed by about 20 per cent. The Osun state government, represented by the Honourable Commissioner of Finance, and the Solicitors to the Issue, Kola Awodein and Co, were also award recipients for the deal. Besides, Lotus also developed the country's first Islamic Index on the NSE, known as the “NSE Lotus Islamic Index” or NSE LII. The Index recorded +44.21 per cent in 2012 and +61.84 per cent in 2013.

After the suspension of the Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, a report of the Financial Reporting Council of Nigeria was published. The council also advised the President to cause the CBN Governor to cease from holding that office.

The link shows the details of the accusations, which came after the Governor accused the national oil company of USD 20 bn fraud.

Most critics of Sanusi start with the idea that the Nigerian Central Bank had over-reached its mandate. Although they are probably right, his activities must be applauded in a country where institutional failure has reached epic proportions. Sanusi has been a clear promoter of industrial policy for many years. His passion for tackling the oil sector corruption started on day one of his job. In parse ing through the bad debts that had been run up by the banks, he saw the cancer of the fuel subsidy racket. He didn’t flinch in taking on the banks, he didn’t flinch in taking on the fuel subsidy cabal, he didn’t flinch in taking on the power cabal, he didn’t flinch in taking on the NNPC. Is he a one-man anti-corruption agency – of course not. But if not him, then who? Nigeria is about to find out.

The former Governor of the Central Bank of Nigeria Mallam Sanusi Lamido Sanusi claimed that 20 billion US dollars had gone missing from the coffers of the NNPC. Two weeks later, he was been suspended and relieved of his duties. As a next step, he will probably be subjected to a formal probe and the EFCC will be called in to investigate his tenure of office. Femi Fani Kayode commends his immense courage for speaking out and exposing the monuemental corruption in the government that he once served and that has now decided that they no longer require his services. Kayode is convinced that if you speak truth to power and you take on the system, the system will fight back and they will attempt to destroy you and all that is yours. Yet at the end of the day, the only road that is worth taking is the road of righteousness and truth, and it is the only one that leads to lasting honour and glory.

Nigeria's central bank governor Lamido Sanusi has been suspended by the president for "financial recklessness and misconduct". Mr Sanusi caused shockwaves in Nigeria when he alleged that $20bn (£12bn) in oil revenue had gone missing. He said he would challenge his suspension in order to preserve the central bank's independence. Meanwhile, foreign exchange, bond and money markets have stopped trading because of uncertainty caused by the move. The president, however, does not have the power to sack the central bank governor - only the National Assembly can do this. Although his term in office was due to end in June, the decision to suspend him now is still highly significant. Many Nigerians will think the president has chosen to suspend the whistleblower rather than focus on stopping fraud.

This exclusive interview with Sanusi Lamido Sanusi took place after SaharaReporters followed the ousted CBN governor from the airport to a residence in Lagos shortly after his arrival from Niamey in Niger Republic following his ouster from office by President Goodluck Jonathan.

Jaiz Bank Plc Shareholders' Fund grew by 53 percent to N10.1 billion in 2012 from about N6.45 billion in the previous year, according to its 2012 financial statement. Also, its depositors’ funds stood at N3.29 billion while total investment in the period under review amounted to N1.96 billion. Gross earnings during the period stood at N79.560 million. However, the bank recorded an operating loss of N1.07 billion in 2012. Its total assets climbed to N14.1 billion, from N5 billion in January 2012. The bank's Chairman, Board of Directors, Alhaji Umaru Mutallab said that necessary steps had been taken to ensure the bank obtained a national license aiming to establish its presence in all states of the federation within the next five to six years. The strategies for realising the set targets will include aggressive deposit drive, investment in the real sector of the economy and also in agriculture.

Corruption remains the biggest obstacle hindering Nigeria from achieving its economic potentials, according to the Managing Director of Jaiz Bank, Muhammad Nurul Islam. Speaking in a keynote lecture at a one-day forum of the Finance Correspondents Association of Nigeria (FICAN), Islam said corruption had often given way to a situation where the wrong people had been given leadership responsibilities. Moreover, he said FICAN had a critical role to play in exposing illegal financial transactions. The aim of the FICAN platform was to promote a mechanism for reviewing and analysing activities in the country's economic sphere.

According to the African Development Bank (AfDB), Nigeria has an infrastructure deficit of $360 billion. However, the adequate physical infrastructure in the country has been identified as one of the major factors to support sustained and broad-based strong economic growth. Addressing these challenges will require a substantially larger annual level of investment in infrastructure. However, access to finance, to fund the development of most of these critical sectors has remained a challenge. One of the alternatives today is Islamic finance. Moreover, Islamic finance products have the capacity for ensuring financial inclusion of significant segment of the population.

Jaiz Bank has appointed Muhammad Nurul Islam from the Islami Bank Bangladesh Limited as its new managing director/chief executive to steer its affairs and better position the bank. He takes over from Hassan Usman, who had been acting managing director of Jaiz Bank since April. Nurul Islam has vast knowledge of non-interest Islamic banking experience garnered for over three decades. He holds Masters in Business Administration from the Institute of Business Administration (IBA), University of Dhaka in 1982, with a major in finance and has attended several professional training and seminars. Moreover, he is a member of many professional associations, including Life Member, Association of the Bankers’ Bangladesh.

Operators seeking the licence to underwrite Takaful Insurance have continued to turn in their applications to the National Insurance Commission (NAICOM). Since the process is still ongoing, the number of applications is still not known. Interests have been received from underwriters and the general public. NAICOM will through the licensing demystify insurance practice, making it possible for operators to operate at the grassroots. Ibrahim Hassan, deputy commissioner for Insurance (Technical) NAICOM, said the interested companies must maintain a minimum deposit in a non-interest financial institution at all times and that the provision for the establishment of an Advisory Council of Experts (ACE) must be made in the articles of the Company and there should be establishment of investment policy for the participants’ Risk Fund.

The Nigerian State of Osun has completed N11.4bn sukuk bond issue. The sukuk bond was issued in accordance with enactment of the Osun State Bonds, Notes and Other Securities Law 2012 and setting up the Osun Sukuk Company Plc. Though Islamic in nomenclature, the sukuk bond was a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The N14. 4 bn sukuk (14. 75 per cent) fixed return tranche 2 has 42 investors with Lotus Capital Limited as the leading issuing house and Augusto and co, one of Nigeria’s rating agencies, as the rating agent. Out of the 42 investors, only one of them (Jaiz Bank) is Islamic and the name sukuk is just a nomenclature, saying that the investors are regular Nigerians.

Nigerian Jaiz Bank has increased its branch network to ten, with the commissioning of its Katsina branch this week by the state governor Alhaji Ibrahim Shehu Shema. The bank now has branches in Gombe, Maiduguri, Katsina, and an additional branch in Kano, making two branches in the state. The bank has also added two branches in Abuja, the Federal Capital Territory. The branches are located at the National Assembly and Wuse District. Commissioning the bank yesterday, the governor promised to identify and support the operations of the bank.

Nigeria's Jaiz Bank is currently devising a strategy, leveraging on its relationship with the Islamic Development Bank (IDB), which will enable it invest and help facilitate financing of the nation’s power sector. Representatives of IDB are expected in Abuja for advanced talks. $3.4 billion is currently being sort by government to bridge the yawning infrastructure gap in the electricity transmission sub-sector, considered to be the weakest link in the power value chain. Last month, minister of power, Chinedu Nebo, suggested that Nigerian banks should consider forming consortiums to provide the much needed funding. Jaiz Bank as an entity is on its own not able to finance such large ticket transactions, so leveraging on this relationship with IDB is crucial to being able to invest in the power sector.

In September 2012, the Central Bank of Nigeria launched the Nigerian Sustainable Banking Principles. The adoption and implementation of these principles are compulsory and require Nigerian financial institutions to develop a management approach that balances environmental and social risks. Since its launch, there have been a series of initiatives and dynamism towards embedding sustainability in the Nigerian banking sector. However, sustainable banking in Nigeria could be abandoned if it is not pursued by subsequent Central Bank governors. Unfortunately, the Nigerian business environment is particularly characterised by poor governance and weak consumer voice, which will in turn have implications for the success or failure of the longevity of the Nigerian Sustainable Banking Principles.

The Governor of Zamfara State, Alhaji Abdul’aziz Yari, has said the state would invest the sum of N1.5 billion in Jaiz Bank to shore up the financial institution’s capital base. Speaking in Gusau while inaugurating the bank's 11th branch since it started operations in January last year, he urged citizens of the state to patronise the bank in order to realise the gains of non-interest banking. Moreover, the governor said local government funds would be invested in the bank. People will be mobilised through the mass media to educate them on the importance if the bank, he added. Meanwhile, the Chairman of the bank, Alhaji Umaru Mutallab, expressed appreciation to the governor for his interest in the bank.