Challenges of the Emerging Markets of Islamic Finance in Africa: Nigeria as a Case Study

Abstract

The challenges facing emerging Markets of Islamic Finance in Africa are multi-faceted. They include; constitutional and other legal challenges, liquidity management for IF institutions, reputation and operational risk related challenges, distorted perception of the IF products and services by the consumers among others. The study attempted to proffer relevant solutions to these challenges using Nigeria, the number one economy on the continent as a case study. With three full-fledged banking and insurance institutions and many other windows operators, Nigeria has shown to be a leading emerging market in the practice of the three components of Islamic finance, The methodology adopted was analytical approach. The study concluded that the challenges are surmountable; hence recommendations were made on how best to overcome the teething problems of this nascent industry in the nearest future.