Pandemic Offers Africa a Chance to Boost Sovereign Sukuk Sales

South Africa, Nigeria, Egypt may lead Africa 2021 sukuk offer as the African nations needs financing following the coronavirus pandemic.

Thus, the coronavirus pandemic gives the continent an opportunity to boost its share of Islamic financing.

The global Islamic-finance industry is forecast to expand about 25% this year, after assets declined 23.5 percent in 2020, said Faizal Bhana, the director for the Middle East, Africa and India at Jersey Finance, citing a study by the not-for-profit organization, which promotes the Channel island as a financial center.

In Egypt, the cabinet approved a draft sovereign sukuk law in November, while Kenya has put in place a regulatory framework to govern its Islamic-finance industry ahead of a long-awaited sale of its maiden sovereign sukuk.

South Africa’s Treasury plans to sell a domestic rand-denominated sukuk in current fiscal year which ends in February, while Nigeria is considering Shariah-compliant debt to help finance projects in 2021. Nigeria’s Debt Management Office has already issued three sovereign sukuks, and South Africa sold its maiden Islamic bond in 2014.