Empirical Assessment of Sukuk (Islamic Bonds) Market Development and Regulatory Compliance in Nigeria

Sukuk (Islamic certificates representing ownership interests in underlying assets) are increasingly used by Nigerian federal and state governments as Sharia-compliant financing instruments, yet the depth of the Nigerian Sukuk market, Sharia compliance quality, and regulatory adequacy remain analytically underexplored. This study empirically assesses Sukuk market development in Nigeria and evaluates Sharia compliance quality across issued instruments. A mixed empirical methodology is applied, analysing all federal government Sovereign Sukuk issuances (2017 to 2023) and three state government Sukuk programmes for Sharia compliance quality using the AAOIFI Sukuk Standard 17 evaluation criteria. Documentary analysis of issuance prospectuses is supplemented by structured interviews with twelve Sukuk arrangers, eight SEC officials, and ten Sharia scholars who have certified Nigerian Sukuk. The study evaluates asset-backing adequacy, Ijara structure compliance, Sharia supervisory oversight quality, investor disclosure standards, and secondary market development. Available Islamic capital markets literature from Nigeria identifies the dominance of Ijara al-Musharaka structures among Nigerian Sukuk alongside concerns about the adequacy of underlying asset identification and Sharia audit mechanisms. The AAOIFI Sukuk Standard and the SEC Rules on Sukuk 2017 provide the regulatory and Sharia analytical reference. Findings are expected to reveal growth alongside Sharia governance compliance gaps. Recommendations address mandatory independent Sharia audit requirements, SEC Sukuk disclosure standards, and secondary market liquidity enhancement measures. Keywords: Sukuk, Islamic bonds, Nigeria, Sharia compliance, capital markets.