Islamic Finance | |
Islamic Finance | |
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Thursday, November 08, 2019 / 1:13 PM / Bukola
Akinyele for Proshare
WebTV / Header Image Credit: WebTV
Stakeholders
at the just concluded 4th edition of the African International
Conference on Islamic Finance, AICIF, agreed that there should be conscious
steps to broaden the Sukuk, Waqf and Takaful finance and insurance options to
improve infrastructure development, financial inclusion and economic prosperity
in Africa.
The
submission of session speakers covered some key topics at the event.
Mr.
Abdulkadir Thomas, Chairman Sharia Board, Sterling Bank, speaking on "Managing
Risk and Capturing Opportunities in Sukuk Market," said Malaysia is the
global leader when it comes to Sukuk-based projects.
He
listed the various segments of the Sukuk and its interventions to include;
Abdulkadir
noted the fact that Sukuks have
not been used to mobilize small investments for projects that matter locally to
the investors.
Using Malaysia as a case study, Abdulkadir
called on other markets especially emerging ones to explore crafting dual
tranche sukuks, that can attract the pension and insurance markets (Takaful).
Giving further perspective on the "Regulatory and Cross Border Issues Affecting the Utilization of Sukuk." Mr Ammar Ashraf Director, Financial Services Consulting Price Waterhouse
Coopers, Luxembourg highlighted the fact that Sudan is the leader in the
African Sukuk issuance.
Speaking further Ashraf identified the
considerable challenges Africa is facing to develop a robust Sukuk market,
which include;
According to Ashraf the volume for
Sukuk in Africa is estimated at about $19.516bn at the domestic level and about
$130bn at the international level.
Ashraf also noted that the total number of
Sukuks issued so far in the region is 36.
He
singled out Luxembourg as an emerging leader in the adoption of Islamic
Finance, noting that the country is the 5th in the globe, when it
comes to shariah compliant funds.
Speaking further, Ammar said that, there has
been a robust public private partnership (PPP) in Luxembourg to attract Islamic
Finance players.
He highlighted some of the recent
developments in the country to include;
Assistant Professor, American University,
Washington DC, USA, Amin Mohseni-Cheragholu, also gave insight into
the "Trust Waqf (Endowment), Asset Management and Socially Responsible
Investments".
Cheragholu an American-based scholar
described Waqf as a self-sustaining financing mechanism which can complement
government taxation/revenue in addressing the pressing needs of the society.
The value of Waqf assets according to him
currently ranges from $100bn to $1trn as stated by the 2019 report of the World
Bank, INCEIF, and ISRA.
Giving an overview of Waqf, Cheragholu
said it played a central role during the Golden Era of Islamic Civilization, as
it was an important financing mechanism for building, operating, and
maintaining mosques and religious centers, learning and research centers,
hospitals, bath houses, water canals, wells and caravansaries across the
Muslim World.
Speaking further, Professor Cheragholu
noted that the estimated size of Waqf in Africa is about $13billion per
year, which is 12% of the infrastructure finance deficit in the
region.
For Nigeria he stated that the estimated size
of Waqf cash in Nigeria was $3billion per year which is 10% of the
country's infrastructure finance deficit.
He believed Waqf can play a central role in
Africa and Nigeria's infrastructure finance. Cheragholu emphasized the
value of blockchain technology and believed it can improve technology,
transparency and accountability of the Waqf administration, which can increase
public participation
The Chairman of the Board
of United Insurance Company, Mr Tarig Khalil
Osman in his presentation on "Takaful in Africa, the view from micro to macro" said Sudan was recognized as
the best Takaful compliant nation in Africa, at the 2018 London
takaful summit.
Speaking on the prospects for Africa
and Islamic finance, Osman noted that Islamic finance can be one of the most
important vehicles for developing Africa and Takaful insurance can provide the
mitigation of risk as well as providing cross border services.
He
estimated that the Takaful
global size is currently over $20b is growing at double digit growth and
is projected to become $44b by 2024.
According to him there are currently less
than 1,000 companies that are engaged in Takaful.
In her vote of thanks at the Conference
on Islamic Finance, the Managing Partner, Metropolitan Law Firm and Conference
planning committee Chairperson, Ummanhani Amin said the forum was organized to
educate and create awareness on Islamic finance and was not seeking
to Islamize Nigeria or any other country.
Ummanhani Amin said Islamic Finance is a
Non-Interest Financing model that can serve as a platform for deepening
financial inclusion, eradicate poverty, promote infrastructure development,
create a basis for Public Private Partnerships (PPPs) to incentivize financial institutions
and promote economic growth.
This was the first time Nigeria was hosting
the African International Conference on Islamic Finance, since its inception.
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