Fitch projects growth in Nigeria's non-interest finance and sukuk through 2026

Fitch Ratings expects Nigeria's non-interest finance sector to keep expanding through 2026, and the reason it gives is institutional rather than cyclical: a wave of regulatory reform and new liquidity tools from the Central Bank of Nigeria (CBN) designed specifically for non-interest financial institutions. The growth, in other words, is being built into the plumbing — standing rules, instruments and supervisory capacity — rather than riding a one-off surge in demand.

As of May 2025 Fitch sized the market at roughly US$4 billion. Sukuk make up the largest share at about 53.9 per cent, Islamic banking assets follow at 45.2 per cent, and the remainder is split between takaful (Islamic insurance) and sharia-compliant funds. The agency anchors its outlook on two engines in particular: renewed sovereign sukuk issuance, which gives the market benchmark instruments and depth, and the steady rise of Islamic banking assets.

The report is candid about the obstacles. The sector remains far smaller than Nigeria's conventional financial system, held back by limited public awareness, opposition from some quarters, a thin range of products and distribution channels, a regulatory framework that is still maturing, and a small number of licensed non-interest banks. Takaful is the clearest illustration of how early the stage is — it accounts for under 1 per cent of total insurance assets.

For a reader watching where capability is being built, the significance is the setting: this is happening in Africa's largest economy, outside the Gulf core that usually dominates Islamic-finance coverage. A sovereign that issues sukuk and a regulator that builds liquidity tools for non-interest banks are laying durable institutional groundwork — the kind that outlasts any single year's numbers.

This is a QeRN summary by Ahmed Qerni. Read the original at Nairametrics: https://nairametrics.com/2025/06/05/fitch-projects-growth-in-nigerias-non-interest-finance-sukuk-issuance-through-2026-despite-market-hurdles/.