Babajide Sanwo-Olu, Babatunde Fashola Advocate Non-Interest Finance in Nigeria

• Industry leaders called for greater adoption of non-interest finance to support Nigeria's productive economy.
• The Alternative Bank has demonstrated that non-interest banking can achieve commercial success while supporting economic development.
• Nigeria's challenge is not a lack of capital but rather the absence of trust required for long-term investment.
• Patient capital can play a crucial role in driving sustainable economic growth by connecting capital to productive assets.

The future of finance is not only about the price of capital; it is increasingly about the quality of the economic activity that capital enables.

A private intelligence forum on non-interest finance was held in Lagos, where industry leaders called for greater adoption of this approach to mobilize long-term capital and support Nigeria's productive economy. The event brought together investors, entrepreneurs, and public-sector leaders to examine the role of patient capital in driving sustainable economic growth. Keynote speakers included Lagos State Governor Babajide Sanwo-Olu and former Minister of Works and Housing Babatunde Fashola, who emphasized the importance of non-interest finance in supporting long-term investment. They cited examples such as the Lagos infrastructure programme and the recent dual bond issuance, which have improved the environment for private capital. The forum also highlighted the success story of The Alternative Bank, which has demonstrated that non-interest banking can achieve commercial success while supporting economic development.

Nigeria's challenge is not a lack of capital but rather the absence of trust required for long-term investment. This was emphasized by Muhtar Bakare, Chairman of The Alternative Bank, who noted that what Nigeria lacks is not effort but capital that stays long enough to turn effort into capacity and stability. The distinction between extractive and productive capital matters in this context. In fact, research has shown that patient capital can play a crucial role in driving sustainable economic growth by connecting capital to productive assets while maintaining commercial standards. This approach has been demonstrated by The Alternative Bank's recycling initiative with the Lagos Waste Management Authority (LAWMA) and Nigeria's sovereign Sukuk programme.

The adoption of non-interest finance in Nigeria can offer new opportunities for long-term capital mobilization and sustainable economic growth. This approach has been shown to be commercially viable, with The Alternative Bank achieving success while supporting economic development. Moreover, the convergence of patient capital and productive assets can give Nigeria a first-mover advantage in terms of infrastructure and capital allocation. As such, lawyers advising clients on investments in Nigeria should watch for the growing trend of non-interest finance, which may offer new opportunities for long-term capital mobilization and sustainable economic growth.

Lawyers advising clients on investments in Nigeria should watch for the growing trend of non-interest finance, which may offer new opportunities for long-term capital mobilization and sustainable economic growth.

Source: Original reporting via The Alternative Bank