The growth, opportunities and challenges facing Islamic finance in Nigeria: evidence from waqf and sukuk

The purpose of this study is to examine the growth, opportunities and the challenges facing Islamic finance in Nigeria by exploring the Waqf and Sukuk as Islamic financial instruments. This study is based on a mixed method approach. Quarterly quantitative data on Skuku issuance in Nigeria is obtained from the IFSB database from 2014Q1 -2020Q4 while the qualitative information is obtained through previous studies and other recognized sources. Both Sukuk and Waqf cover substantial economic aspects ranging from investment in the capital intensive public projects to provision of social finance. Collectively, these are expected to contribute substantially to economic growth in Africa. Findings reveal that Sukuk has been officially introduced in Nigeria since 2012, and used to finance a series of government backed projects at the state and national level. Therefore, it is essential to investigate opportunities and challenges of such new investment from the context of developing country like Nigeria. Furthermore, Waqf is a social finance instrument that focuses on the wealth redistribution approach which might be a mechanism for narrowing down the gaps between the rich and the poor. This is another essential Islamic finance tool that tends to improve the living standard of the poor population. Obviously, these two products could contribute to the African economy substantially if they are well implemented according to the principles of Shariah (Islamic law).