Unlike the year 2011 that witnessed a lot of controversies on the issue of introduction of Islamic banking by the central bank of Nigeria (CBN), especially the licenses of Ja’iz bank, the year 2012 witnessed fewer controversies as regard the introduction of the novel scheme. We all remember how some Christian clergies roused against Islamic banking in the year 2011 calling on the national assembly to stop the move as they alleged it would lead to the Islamization of Nigeria. A lawyer from the southern part of the country rushed to court asking the judge to declare Islamic finance unconstitutional. The country’s main umbrella representing the nations Christian bodies, CAN, issued many press releases on the issue of Islamic banking, expressing their reservations on the introduction of the system. But, despite these controversial oppositions the process to introduce the Islamic banking system in the country witnessed some progress. At the beginning of the year the first fully pledge Islamic bank start operation in January of the year with three branches in Kano, Kaduna, and Abuja putting to history book the believe that the operation of a fully pledge Islamic Bank is not possible in a secular Nigeria. Later in the year in an effort to expand it operations across the country Ja’iz Bank sold its shares out in a private placement helping it to attain the minimum amount of capital required by the Central Bank for a bank to operate as a national bank with branches across the country. Ja’iz has since joined efforts to finance important commercial dealings and projects across the country, especially in the real estate sector and retail businesses.
Also during the year the Nigerian Stock Exchange (NSE) and Lotus capital (a fund management firm) entered into a joint agreement that led to the establishment of the first ever Islamic Index on the Nigerian stock exchange that has since made it debut operating along side the all shares index of the exchange. The establishment of the index has made it possible for those craving for ethical means of investing in and outside the country to invest their hard earned money. This move has further widening the number of investment channels available to those restricted by religious injunctions in their business and investment dealings. As at Friday 28th December 2012 the NSE LOTUS Index stood at 1,771.59 higher than NSE-30’s 1,324.44 but lower than the NSE all shares’ 27,866.51. The number of financial institutions that shows interest in entering the Islamic finance industry in the country also witnessed an increase with interest been shown in areas such as insurance, micro financing, Islamic banking window, and fund management. Likewise interest from academic institutions on courses related to Islamic banking and finance has increased; the centre established at Bayero University Kano (BUK) the previous period to run Islamic Banking and finance courses and train Islamic Banking and finance professionals has already started its programs during the first half of the year with different postgraduate programs. The country’s deposit insurance body, the Nigerian deposit insurance corporation (NDIC) also organized training programs for its staffs towards equipping them with the knowledge of the field and on the possible challenges of insuring Islamic financial institutions. Next year we look forward to see whether the Central Bank will make its plan to introduce Sukuk bond into the Nigerian capital market a reality.