Analyst Describes The Challenges Facing Sukuk In Africa


Wednesday, January 22, 2019 / 8:15 AM / Bukola Akinyele for WebTV / Header Image Credit: Twitter, @ammaraa77


As the Non-Interest Finance market continues to gather momentum in Africa, one segment that provides immense opportunity for the growth and development of the region is the Sukuk Bond.


Ever since the first set of issuances in Africa, it has become a veritable source of financing the infrastructure and sustainable development of the continent.


At a recent Islamic Finance Forum in Lagos, Ashraf Ammar, a Director with Price Waterhouse Coopers (PwC) Luxembourg engaged stakeholders on "Regulatory and cross border issues affecting the utilization of Sukuk across Africa."


Countries like Malaysia and Indonesia have leveraged Sukuks to It was an opportunity for Mr. Ashraf Ammar to highlight the challenges facing the development of the Sukuk market in Africa.

Finance vital urban renewal projects and social investments in the areas of healthcare, clean environment/waste management, water sanitation, link roads and transportation projects.


In Africa, it is on record that Sudan leads in the area of the issuance of Sukuks.


At the moment, while Nigeria has issued two Sukuk in 2017 and 2018, Sudan has achieved the issuance of 36 Sukuk.


According to Mr. Ammar, the challenges facing the development of the Sukuk market in Africa, include the following;

  • Regulatory, Tax and Legal Frameworks
  • Cost of Issuance v Conventional loans
  • Lack of Transparency
  • Hedging Currency Risk
  • Access to the financial fundamentals of the Corporates issuing debt instruments
  • No Debt Indexes benchmark
  • Fragmented Islamic Finance Market in Africa
  • The level playing field in the taxation of Islamic contracts
  • Raising awareness among multilateral development banks and agencies


He believed if the issues mentioned were resolved at the sub-regional and regional level, it would go a long way in opening up the African frontier for the penetration of the Sukuk segment of the Non-Interest finance market.


Africa, according to Ammar, is one continent that needs to tap into the opportunities provided by the Sukuk because of its huge infrastructural gap that requires massive capital investments.


The Sukuk segment of the Non-interest finance market can address the infrastructural deficit in Africa, as it has worked in various parts of Asia.

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