By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) has stated that islamic finance assets is projected to reach $3.69 trillion by 2024.
This is even as they noted that the COVID-19 pandemic halted the growth of the Islamic finance sector but stimulated the development of more inclusive and socially driven finance, whether through crowdfunding, public-private partnerships or support for SMEs.
According to the apex bank’s Financial Inclusion Newsletter released yesterday, the estimated value of Islamic finance assets increased by 13.9 per cent to $2.88 trillion in 2019 from $2.52 trillion in 2018.
The bank revealed that the top three countries by the value of islamic finance assets include: Iran, Saudi Arabia, and Malaysia and added that the countries retained their positions from the previous year.
“However, due to the impact of the COVID-19 crisis, the value of islamic finance assets was expected to show no significant growth in 2020 but is expected to rebound and grow at a Compound Annual Growth Rate (CAGR) of 5 per cent from 2020 onwards to reach $3.69 trillion by 2024”, the CBN said.
The CBN had in June 2020, revealed plans to update a regulatory framework to integrate a non-interest window in all its intervention programmes to support SMEs affected by the COVID-19 pandemic.
President Muhammadu Buhari had requested the approval of the House of Representatives for a borrowed $5.5 billion from external sources to implement the country’s 2020 budget. The sum included $1.13 million borrowed from the IsDB, which supported Nigeria with $600 million due to the impact of COVID-19
The Islamic Development Bank (IsDB) raised $1.5 billion with a first Sukuk of sustainability designed to support member countries experiencing the pandemic. Furthermore, the IsDB’s Islamic Corporation for the insurance of investment and Export Credit (ICIEC), among other organisations, provided insurance for Nigeria’s $1.2billion in-kind loan from Brazil for the Green Initiative.