CFG Africa backs non-interest instruments to unlock long-term capital in Nigeria

CFG Africa is pushing for a broader role for non-interest banking in Nigeria’s financial system, arguing that larger and more frequent Sukuk issuances could help unlock long-term capital for infrastructure, deepen domestic capital markets and draw in investors seeking asset-backed and ethical instruments amid global volatility.

The call was a central theme at the CFG Africa non-interest investment forum held in Abuja on Thursday, as policymakers, bankers and fund managers debated how Nigeria can mobilise new pools of capital at a time when conventional funding sources are under strain.

CFG Africa was formed from the merger of Maynard Partners and Concreed Capital and operates across asset management, investment banking, advisory and trusteeship.

Speaking on the sidelines of the forum, Babajide Lawani, Managing Director and Chief Executive Officer of CFG Africa, said the group had deliberately positioned itself in the non-interest finance space to develop products that align with ethical and faith-based investment preferences while delivering competitive returns.

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“Beyond the services we offer, we are quite open-minded and intellectually curious,” Lawani said. “We do not like to chase the traditional things other markets will do, and it is one of the reasons why we have intentionally entered the non-interest space. We think we can bring new things to that market and new products that can support investors with that orientation.”

Lawani said CFG Africa had recorded strong growth over the past five to six years, expanding “in multiples on an annual basis” as it built client confidence and deepened market participation. He described non-interest finance as a way to expand Nigeria’s investable capital base by accommodating investors who, for faith-based reasons, avoid conventional interest-bearing instruments.

“The non-interest space can drive inclusion,” he said. “There are people who believe, because of their faith, they should not invest in certain traditional investments. By carving out this space, you expand investable funds around Nigeria and allow people to live a wholesome life, investing according to their orientation without feeling they are losing out.”

The forum comes as Nigeria grapples with infrastructure deficits, tight public finances and volatile global markets that have pushed investors toward assets perceived as safer and more transparent.

In his keynote address, Basheer Oshodi, Chief Executive of TrustArthur and President of the non-interest financial institutions association of Nigeria, said rising geopolitical risks and economic uncertainty had strengthened the case for asset-backed instruments such as sukuk.

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“Gold has appreciated by between 60 and 80% in recent years, and almost 20% this year alone,” Oshodi said. “You can no longer predict global economics and global politics, so there is a shift into other asset classes.”

Oshodi pointed to Nigeria’s own experience as evidence of strong appetite for well-structured instruments. The country’s most recent 10-year Ijarah Sukuk was oversubscribed by about 735%, mirroring demand seen in Eurobond offerings.

Sovereign Sukuk issuances by the Federal Government have attracted subscriptions of more than 2.21 trillion naira against offers of 300 billion naira, according to the Debt Management Office (DMO).

“The Sukuk market is not doing badly at all,” Oshodi said. “But once-a-year issuance is not enough. We should be issuing at least quarterly, and the size should be much bigger. People will still oversubscribe.”

He argued that deeper and more frequent issuance would allow fund managers to develop secondary instruments, improve liquidity and channel funding toward infrastructure at scale. Oshodi also highlighted structural gaps in Nigeria’s non-interest ecosystem, noting that the combined assets of the sector remain smaller than those of a handful of digitally enabled microfinance banks.

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“Three digital microfinance banks have assets bigger than the entire non-interest banking market put together,” he said. “These gaps are opportunities. Technology is the growth driver, and it has to be now.”

Other speakers at the event underscored the role of non-interest finance in enforcing discipline through asset-backed structures. Ameenah Adebayo-Shittu, group head of compliance at Lotus Bank, said misconceptions that Shariah-compliant products deliver lower returns are not supported by data.

“In 2025, Shariah-compliant US equity funds delivered between 14 and 16% returns, and in Nigeria, Sukuk has been oversubscribed many times,” she said.

CFG Africa executives said the group’s ethical fund was designed to address a shortage of investment options in the non-interest space and to promote inclusion by pooling exposure to government sukuk, Islamic investments and ethical equities. More products are planned as collaboration across the ecosystem deepens.

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