Nigeria Positions Itself as a Leading Hub for Islamic and Ethical Finance in West Africa

Nigeria is rapidly establishing itself as a key player in Africa’s Islamic and ethical finance sector, driven by the continuous expansion of its non-interest financial industry. Industry experts anticipate significant growth opportunities across banking, investment, insurance, microfinance, and fintech.

This momentum builds on a sector valued at N5.77 trillion in 2025, where sovereign Sukuk represented N1.19 trillion, according to a Proshare report cited by OpenSpace Shariah Adviser Zubair Mughal.

Speaking at an OpenSpace press conference in Abuja, Mughal highlighted Nigeria’s potential to become a premier Islamic and ethical finance hub in West Africa. He cited the nation’s large population, robust entrepreneurial base, deepening capital market, and increasing demand for non-interest financial products as key drivers.

He emphasized that Islamic finance has evolved from a niche, faith-based alternative into a globally recognized system. Its core principles—asset-backing, transparency, fairness, risk-sharing, and ethical investment—are now widely accepted.

Mughal noted that global Islamic finance assets approached $6 trillion in 2024, reaching approximately $5.98 trillion. He pointed out that this growth makes the sector increasingly vital for African economies seeking alternative financing for infrastructure, SMEs, agriculture, housing, trade, and financial inclusion.

He added that Nigeria’s regulatory framework continues to mature, supported by the Central Bank of Nigeria’s backing of non-interest banking and the Securities and Exchange Commission’s efforts to develop the Sukuk market.

Looking ahead, he stated that the next phase of growth will rely on practical, accessible, and technology-driven solutions that push Islamic finance beyond conventional banking channels.

“Fintech plays a crucial role by reducing transaction costs, streamlining customer onboarding, enhancing transparency, and making ethical financial products accessible to households, SMEs, market traders, and young entrepreneurs,” he remarked.

In this context, Mughal revealed that OpenSpace is developing a suite of non-interest financial products, including Murabaha, Ijarah, and Diminishing Musharakah.

He detailed that Murabaha allows customers to acquire goods and business assets through a transparent cost-plus-profit structure, while Ijarah enables access to productive assets via leasing. Diminishing Musharakah offers a gradual ownership model, allowing customers to progressively acquire assets from a financier.

Mughal also disclosed that OpenSpace intends to secure the necessary regulatory licenses for non-interest financing, after which it plans to explore Sukuk issuance.

He noted that a Sukuk issuance by a fintech-driven institution could expand investment opportunities, support business growth, and further deepen Nigeria’s non-interest capital market.

Also speaking at the event, OpenSpace CEO Titus Adakole Ikeh stated that the company is entering the ethical finance space to make financial services more accessible, transparent, and relevant to underserved Nigerians.

Ikeh asserted that ethical finance should transcend mere transactions, empowering individuals and businesses to make informed financial decisions, acquire assets, scale their enterprises, and build wealth. He emphasized that the company’s proposition is founded on fairness, transparency, accountability, and trust, and that ethical finance should serve everyone regardless of their religious or financial background.

According to Ikeh, OpenSpace’s Mudaraba proposition will allow customers to provide capital while the company serves as the investment manager, deploying funds into Shariah-compliant opportunities and distributing realized profits based on a pre-agreed ratio.

Furthermore, Ikeh noted that the company is integrating artificial intelligence into its financial ecosystem to enhance customer experiences, refine decision-making, and broaden access to financial services.

He explained that the platform is built on a unified customer financial core, comprising a single customer information file, a wallet engine, and an investment pool engine.

The CEO added that OpenSpace is integrating automated Know-Your-Customer verification, customer assessment, payment collection, digital documentation, and electronic signatures into its operations.

He further stated that AI and machine learning will be applied to customer analytics, portfolio monitoring, anomaly detection, and personalized financial services.

Ikeh concluded that the company’s ambition is to give financial inclusion more meaning by enabling small businesses to acquire productive equipment, helping individuals work toward asset ownership, and allowing customers to save and invest in alignment with their values.

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