African governments are looking to sharia-compliant financial markets to attract investment from the Middle East. The trend is just gathering strength, and experts expect more funds to flow into infrastructure and other major projects.
The latest wave of finance to reach African corporations and governments is coming from the Middle East, with an increasingly large sharia-compliant component.
Islamic bankers don’t need new excuses to travel to the world’s sunnier climes, but meetings in Mauritius next to its pristine coral sand beaches could soon become a feature of the market – and not just for obvious reasons.
Africa is doing well and it is where people want to be right now. This is something bankers have been saying for years, but recently it has even been true. In the conventional bond market, African sovereign supply in 2014 is finally in the process of delivering what bankers had been hoping for all of last year, while the reception of deals has been exceptional.
Africa is for the first time embracing large-scale Islamic finance as countries seek to tap cash-rich Middle Eastern investors to finance their large infrastructure programmes.
The market for sukuk, or Islamic bonds, received a boost this month after Nigeria became the first major economy in sub-Saharan Africa to use the $100bn a year Islamic market, followed days later by Senegal.
The Malaysia-based International Islamic Liquidity Management Corp (IILM) has reshuffled its sharia board, losing four of its original six members including senior Saudi and Qatari scholars, according to the body's website.
The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was founded in October 2010 to help develop cross-border markets in Islamic financial instruments.
Management of the International Islamic Liquidity Management Corp (IILM) is meeting this week to try to minimise delays to the issue of its first sukuk, a source close to the programme said on Tuesday.
The official, who cannot be named as he is not authorised to speak publicly to media, said the meeting would discuss regulatory treatment of the sukuk, the last remaining hurdle before issuance.
Saudi Arabia has left the International Islamic Liquidity Management Corp (IILM), which is preparing to launch its first long-delayed sukuk or Islamic bonds since its inception in 2010, the IILM said late on Wednesday.
IILM did not give a reason for Saudi Arabia's exit. The central banks of Qatar and Malaysia bought out Saudi Arabia's share.
International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said.
Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments.
AlHuda Centre of Islamic Banking & Economics (CIBE) and AKHUWAT are organizing International Conference on Islamic Microfinance on June 13, 2011 at Faisal Auditorium Islamabad wherein delegates from 12 countries will grace the occasion and 800 participants will attend this mega event. The aim of this conference is to choke out the plan of poverty alleviation on national and international scale to lessen poverty, social welfare and to tackle other problems pertaining to it.
Mauritius' first fully-fledged Islamic bank launched operations on Thursday, as the Indian Ocean island seeks to become a regional Islamic banking hub. Mauritius wants to tap into the roughly $1 trillion Islamic finance industry, and the central bank also plans to offer sharia-compliant short-term liquidity tools.
Hesham Shokry, chairman of Century Bank said its first two to three years would focus on wholesale banking and treasury and wealth management. Wholesale banking, he said, would comprise debt and equity capital markets and fund management.