NGX Launches Non-Interest Finance Board to Boost Shariah-Compliant Investments

The Nigerian Exchange Limited (NGX) has taken a major step toward strengthening the country’s ethical finance sector by launching its Non-Interest Finance Board. This new platform is designed to bring together all Shariah-compliant investment products—such as equities, bonds, and Exchange Traded Funds (ETFs)—in one place. By creating a dedicated board, NGX aims to improve visibility, accessibility, and trust for both local and international investors who are looking for non-interest and socially responsible investment options.

A Growing Market for Shariah-Compliant Finance

Shariah-compliant finance, also known as Islamic finance or non-interest finance, is based on ethical and faith-based principles. It prohibits interest-based transactions and investments in businesses considered harmful or unethical, such as alcohol, gambling, and weapons manufacturing. Instead, it focuses on risk-sharing, asset-backed financing, and socially responsible activities.

Globally, Islamic finance has grown into a multi-trillion-dollar industry. Market reports project continued expansion due to rising demand in Muslim-majority countries, as well as increasing interest from non-Muslim investors seeking ethical and sustainable investment alternatives. The launch of the NGX Non-Interest Finance Board is a timely response to this trend and positions Nigeria to attract a bigger share of this global market.

Why NGX Created the Non-Interest Finance Board

Until now, Shariah-compliant investment options in Nigeria were scattered across different market segments. This made it difficult for investors—especially those new to the Nigerian market—to identify, compare, and trade these products easily. The Non-Interest Finance Board brings everything together in a central location.

By doing so, NGX is making the market more transparent and easier to navigate. Investors can now find all non-interest products in one place, check their details, and make informed decisions without having to search multiple listings. The board also provides a clear framework for companies that want to list their Shariah-compliant instruments, ensuring they meet approved standards and guidelines.

Products Available on the New Board

At launch, the Non-Interest Finance Board included a variety of investment products:

• Bonds and Sukuk: These include both government and corporate sukuk, such as the TAJ Sukuk Series 1, LASUK May 2030 bond, and several Federal Government Sukuk maturing between 2025 and 2033. Sukuk are asset-backed securities that comply with Shariah law, offering returns from underlying assets rather than interest.

• Equities: Currently, JAIZ Bank Plc, Nigeria’s leading non-interest bank, is listed as part of the board’s equity segment.

• Exchange Traded Funds (ETFs): The LOTUS Halal Equity ETF, which invests only in Shariah-compliant stocks, is also featured.

This mix of assets allows investors to build a diversified portfolio while ensuring that all holdings meet Shariah compliance standards.

Strategic Benefits for Nigeria’s Capital Market

The Non-Interest Finance Board offers several advantages for the Nigerian financial system:

1. Boosting Financial Inclusion – Many investors, particularly in Muslim-majority regions of Nigeria and abroad, avoid conventional finance because it does not align with their ethical or religious beliefs. By expanding Shariah-compliant options, NGX is giving these investors a place in the market.

2. Attracting Foreign Investment – Nigeria can now position itself as a hub for Islamic finance in Africa. Investors from the Middle East, North Africa, and Southeast Asia are increasingly looking for new markets to diversify their portfolios, and a well-regulated, transparent board can draw them in.

3. Encouraging Market Growth – With a dedicated platform, there is potential for more companies and government bodies to issue sukuk and list halal-compliant equities or ETFs. This can lead to higher trading volumes and a stronger capital market overall.

Support from Regulation and Policy

The creation of this board follows the approval of a formal framework by the Nigerian Securities and Exchange Commission (SEC) in January 2025. The framework outlines the requirements for listing non-interest products, ensuring that all offerings are reviewed for Shariah compliance before entering the market.

This regulatory backing builds investor confidence by ensuring transparency, ethical integrity, and proper risk management. It also aligns with Nigeria’s broader economic goals of diversifying its financial system and attracting more ethical investment capital.

Market Context and Global Trends

Islamic finance is one of the fastest-growing areas in the global financial sector. According to industry forecasts, the total value of Shariah-compliant assets worldwide could reach nearly US$5 trillion within the next few years. Growth is being driven by a combination of population trends, increasing wealth in Muslim-majority countries, and the rising popularity of ethical investment among all demographics.

Nigeria’s decision to establish a dedicated non-interest board is well-timed. The country already has experience in issuing successful sukuk bonds, which have been used to finance major infrastructure projects like roads and bridges. By offering a wider range of products and making them easier to access, NGX can play a leading role in Africa’s Islamic finance market.

Opportunities for Investors

For retail investors, the board offers an opportunity to participate in a market that combines financial returns with ethical values. They can invest in instruments backed by real assets and businesses that align with responsible investment principles. For institutional investors, the board creates an avenue to diversify portfolios, reduce risk, and access markets that were previously difficult to enter.

The inclusion of ETFs like the LOTUS Halal Equity ETF is particularly valuable for those seeking exposure to a basket of Shariah-compliant stocks without having to research each one individually. Government sukuk, on the other hand, appeal to risk-averse investors looking for stable returns backed by state-owned projects.

What Lies Ahead

The success of the Non-Interest Finance Board will depend on continued product development, investor education, and strong regulatory oversight. NGX is expected to work closely with market operators, Shariah advisory councils, and global Islamic finance organizations to ensure the board meets international best practices.

If more companies and institutions embrace non-interest finance, the board could expand rapidly in the coming years. This would not only benefit investors but also contribute to Nigeria’s economic development by funding infrastructure, supporting small businesses, and creating jobs.

The launch of the NGX Non-Interest Finance Board marks a major milestone for Nigeria’s capital market. It reflects a growing awareness of the importance of inclusive finance and the need to provide investment opportunities that align with a wide range of ethical and cultural values.

By bringing together Shariah-compliant products under one transparent and accessible platform, NGX has made it easier for both local and global investors to participate in Nigeria’s growth story. With strong regulatory backing and a clear vision, the board is set to play a significant role in the expansion of ethical finance in Africa and beyond.