The failure to develop the industry has also limited the region’s integration with the wealthy eastern half of the Arab world, the GCC, a source of Shari’ah compliant capital that could have helped develop the Maghreb’s social infrastructure, says the Africa Development Bank (AfDB) in the report: ‘Islamic Banking and Finance in North Africa: Past Development and Future Potential’.
Investment funds are also rare. Egypt has nine Islamic funds registered with the total amount of investment around $175m. There is also one Tunisian Islamic fund, but no capital has been seeded to date, according to AfDB.
“Both Islamic mutual funds that provide portfolio investment in listed stock and foreign direct investment can contribute to the private sector development needed to expand employment opportunities for young people completing their secondary or university education in North Africa,” the bank reported.
The bank said that Islamic project financing covering 24 schemes in North Africa worth approximately $2.4bn have been approved.
The bank reported: “Construction has started on most of these projects. Many of the schemes involve Istisna’a; a Shari’ah based funding method for projects that has a proven track record of success. Shorter term Islamic debt financing has also been provided to North African countries, mainly involving Murabahah and Ijarah, with 28 deals worth over $5.3bn.”
source: The Islamic Globe