Mr. Eguarekhide Longe, Managing Director of AIICO Pension Managers Limited, made this point while speaking on the State of Islamic Finance in Nigeria.
He stated that the investment regulation came up in 2004-2014, leading to the Pension Reform Act (PRA 2014), and that in 2018, the National Pension Commission introduced a multi-fund structure, as opposed to the previous single fund structure.
According to him, it has been extremely beneficial because many investors want to invest in Islamic finance. In addition, an implementation and framework were introduced to ensure that actual investing is done in accordance with Islamic principles.
Part of the CBN regulation is the appointment of a resident shariah advisor to each pension fund administrator or team to ensure that things are done correctly. There must also be recognition that fund 6 must-have Islamic shariah-compliant assets as well as conventional assets for a period up to 2025 when it will be completely shut out for the funds to absorb all contributions and make full investments.
He stated that pension managers believed that investing in projects tied to specific assets could be monitored and determined to meet their objectives.
Longe acknowledged that the Islamic finance sector in Nigeria is expanding, with increased interest from market participants and an increasing number of players, including two Islamic banks, four Takaful insurance companies, several microfinance banks, and managed funds.
The first Sukuk, issued in 2017, which was invested in a physical roadshow, was successful and received a 105 percent subscription; the second Sukuk received a 132 percent subscription; and the third Sukuk, issued in 2020, received a nearly 470 percent subscription.