Yinson Holdings' subsidiary Yinson Production (West Africa) has converted its existing US$780mil conventional loan to an Islamic Murabahah term financing facility. Group executive chairman Lim Han Weng said this was the largest Islamic facility for floating production storage and offloading (FPSO) financing to-date. Maybank Investment Bank acted as the coordinating bank for the conversion while Maybank Islamic acted as the syariah adviser. Upon completion of the conversion, Yinson is expected to meet the debt over total assets financial ratio benchmark required by the Securities Commission for a syariah-compliant security.
Africa Finance Corporation (AFC), a pan-African development finance institution, has issued its maiden Sukuk as the first Sukuk to be issued by an African supranational entity. The initial target of US$100 million was more than twice oversubscribed, resulting in the transaction being upsized to US$150 million and a final order book of approximately US$230 million. The privately placed Murabaha Sukuk has a three year tenor and will mature on 24 January 2020. Emirates NBD Capital, MUFG and RMB acted as Joint Bookrunners and Joint Lead Managers with Emirates NBD Capital also acting as the Sole Global Coordinator. Andrew Alli, President and CEO of AFC, said this Sukuk represents a milestone for AFC and helps to diversify its portfolio to continue delivering real impact across the continent.
Emir of Kano, Malam Muhammad Sanusi II is expected to speak at an Islamic finance conference organized by the International Institute of Islamic Banking and Finance (IIIBF) at Bayero University, Kano. The Director of the institute, Binta Tijjani Jibril, said the conference would draw participants from within Nigeria as well as other countries such as the United States, Malaysia, Saudi Arabia, Morocco, Indonesia and Egypt. She added that when the mayor of London came to Nigeria, he advised the government to embrace Islamic finance because of its benefits. Britain is competing with Malaysia to be the hub of Islamic finance in the world because they see it as good business not a religious issue.
Two Takaful insurance companies have commenced operations in the country, thus, becoming the first set of fully-fledged Takaful Insurance companies in Nigeria. The two companies are Jaiz Takaful Insurance Company, with head office in Abuja, and Noor Takaful Insurance Company based in Lagos State. Although there is still a misconception about Takaful Insurance that it is a scheme for the Muslims, the two operators believe that with increased awareness and education they will correct this misconception. The chairman of Noor Takaful Insurance, Ambassador Shuaibu Ahmed, said Takaful is about joint guarantee, whereby individuals jointly guarantee themselves against any loss or damage. The CEO of Jaiz Takaful Insurance, Momodu Musa Joof, said his company’s products are inspired by the need for customers to benefit from the contributions they pay as policyholders.
Jaiz Takaful has unveiled its profit sharing insurance concept to the Nigerian public. The CEO of Jaiz Takaful Insurance, Momodu Musa Joof, said that their products are inspired by the need for customers to benefit from the contributions they pay as policyholders. He added that the concept is very transparent and practical. Jaiz Takaful Insurance is a public limited liability company registered with Corporate Affairs Commission (CAC) and regulated by National Insurance Commission (NAICOM). It is among the first full-fledged Takaful insurance providers in Nigeria which are shariah compliant and it is now open for business to Muslims and non-Muslims across Nigeria and beyond.
Africa Finance Corp (AFC), a pan-African multilateral institution based in Nigeria, is likely to make a debut U.S. dollar sukuk issue by early February. If AFC makes a final decision to go ahead with the proposed debt sale over coming days, the sukuk will be issued in two or three weeks through a private sale. The sukuk would be structured with a murabaha format and use Nasdaq Dubai's platform for murabaha transactions. Mohamed Damak, global head of Islamic finance at S&P Global Ratings, said more sukuk issuance will come from Africa-based issuers over the next few years as borrowers seek to expand their investor bases. Another reason for issuers in Africa is that sometimes sukuk can be cheaper than conventional bonds, especially when it attracts significant interest from the market.
The Nigerian Stock Exchange is set to list Nigeria’s first non-interest commercial bank, Jaiz Bank. The council of the Nigerian Stock Exchange (NSE) has approved the bank’s listing of its entire issued share capital on the exchange. Jaiz Bank will be listing a total of 29.46 billion ordinary shares of 50 kobo each at 1.25 naira, indicating a start-off market capitalisation of 36.83 billion naira. The bank has more than 20,000 shareholders, including shareholders such as the former Chairman of First Bank, Umaru Mutallab, industrialist Aminu Dantata, and development finance institution- Islamic Development Bank. The listing will be executed by way of an introduction, however, the company has indicated its interest in an Initial Public Offering.
The Insurance (Amendment) Act 2016 signed into law by President Uhuru Kenyatta is set to enhance Kenya's position as the premier Islamic financial hub in Africa. The move came a week after the Capital Markets Authority (CMA) was admitted by the Council of the Islamic Financial Services Board (IFSB) as an associate member of the board. The new law provides for the licensing and regulation of Takaful insurance business in Kenya in order to encourage international investment in this sector. The decision to admit CMA was made at the 29th IFSB Council meeting held in Cairo, Egypt on December 14. In October, the government launched the Islamic Finance Project Management Office (PMO). CMA's Chief Executive Paul Muthaura said the authority membership in IFSB is a key step towards the development of Kenya as an Islamic finance hub. The Insurance (Amendment) Act 2016 now enables the operationalisation of risk-based solvency requirements for insurers that were introduced in the Finance Act 2013. Among those proposals is a requirement that an insurer should maintain a 100% capital adequacy ratio at all times.
Nigeria is looking for financial and legal advisers and trustee firms to organise its first Islamic bond in the domestic market, the country's Debt Management Office (DMO) said on Monday. The Opec member, which is Africa's largest economy, is working on a debut sovereign sukuk but has yet to determine the size of a potential deal. Nigeria, which is in a recession and needs to raise funds to plug a budget deficit, has set up a government committee to advise on the amount to be raised from the Islamic bond sale, the timing and jurisdiction of the issue. Issuance of a sovereign sukuk is part of a plan by Nigeria's debt office to develop alternative sources of funding and to establish a benchmark curve.
Funding Africa’s huge development needs has long represented a big challenge. This has spawned all kinds of innovative financing mechanisms in the past and could spell an opportunity for Islamic finance, notably haria-compliant bonds, or Sukuk. Still in an embryonic state in Africa – but growing nonetheless – these instruments could play a potential role in delivering large infrastructure projects, from building new airports to constructing power plants and building roads. While it is early days for Africa, on a global scale Islamic finance is not a new concept.
A longstanding feature of the financial markets of Malaysia – a world leader in the field – and across the Middle Eastern Gulf, its spread now encompasses non Muslim-centric territories worldwide. This is a pattern that is catching on, albeit slowly, in Africa. While northern Africa has provided a natural entry point for Islamic products, current activity now focuses on sub-Saharan markets, notably in West Africa.
In January 2012, the Central Bank of Nigeria granted Jaiz Bank an approval in principle to operate as a regional interest-free bank in northern Nigeria. As a result of that, Jaiz bank became the first and the only full-fledged Islamic banking in Nigeria. Islamic banking is based on the principles of profit and loss sharing.
According to Mr. Muhammed Nurul Islam, a manager at Jaiz bank, the bank offers what is called a mudaraba (profit- and loss-sharing deposit). And Jaiz bank does not finance any customer without a purpose; he explain further that the primary means of Islamic finance are based on trading, and the bank trading activities are Sharia-compliant investments with the money deposited by customers. The customers and Jaiz bank share the risks and profits between them.
A Chartered Accountant and Tax Administrator, Mr. Bicci Alli has said that the federal government as well as states cannot shun Islamic financial instruments whose market is valued at over $2.6 trillion, because it has the capability to bridge the infrastructure deficit in the country.
The federal government is presently looking for financial and legal advisers and trustee firms to organise its first Islamic bond in the domestic market, the Debt Management Office (DMO) said on Monday. Nigeria is working on a debut sovereign sukuk but has yet to determine the size of a potential deal. Issuance of a sovereign sukuk is part of a plan by Nigeria’s debt office to develop alternative sources of funding and to establish a benchmark curve.
The International Institute of Islamic Banking and Finance (IIIBF), Bayero University Kano, has said the Sovereign Sukuk bond to be issued by the federal government in 2017 could be the solution out of recession. Prof. Binta Tijjani, the director of the institute stated this yesterday when she led the management team of the institute on a courtesy call to Media Trust Limited in Abuja.
Recall that initially, the Debt Management Office (DMO) on behalf of the federal government was to issue a Sovereign Sukuk bond this year but shifted it to 2017. The Sukuk Islamic bond is structured in such a way as to generate returns to investors without infringing Islamic law that prohibits riba (interest).
The Christian Association of Nigeria (CAN) on Thursday condemned the appointment of the governor of Nigeria’s central bank as leader of the International Islamic Liquidity Management Corporation (IILMC). In a statement by CAN’s president, Samson Ayokunle, the association described the appointment of Godwin Emefiele as the IILMC chairman, as unconstitutional and totally unacceptable.
According to CAN, the government’s decision to accept the appointment amounted to denouncing Nigeria as a secular state, in negation of section 10 of the 1999 constitution. “There have been reports that the IILMC recently appointed the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele as its Chairman during its 17th Governing Board meeting in Jakarta, Indonesia. “Section 10 states that The Government of the Federation or a State shall not adopt any religion as State Religion. This action by Nigeria’s government is in clear negation of the constitution, especially this section,” the statement said. The association re-emphasised its earlier allegation that the Nigerian government plans to make the country an Islamic state.
The #Nigerian government’s move for sukuk has reached an advanced stage. As work continues on the process of the planned sovereign sukuk, the size of the possible deal has not been determined. The Debt Management Office (DMO) had opened its door for expression of interests from entities, including banks and issuing houses, needed in the process, with deadline for bids submission slated for January 9, 2017. This came a few days after the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, was elected Chairman of the International Islamic Liquidity Management Corporation (IILM). His mandates include the facilitation of effective cross-border liquidity management instruments. Meanwhile, the African Development Bank Group (AfDB) has approved the $250 million loan for the Federal Government for the development of a youth-oriented initiative called ENABLE Youth Nigeria. According to the bank, the scheme would contribute to job creation, food security and nutrition, rural income generation and improved livelihoods for youths.
In #Kenya the Sharia-compliant lender First Community Bank (FCB) has laid off a third of its workforce as effects of the recent capping of interest rates continue to shake the banking industry. The lender’s staff costs stood at Sh241.4 million as at June 2016 which rose to Sh365.2 million at the end of September, prompting action by the bank’s management. The bank, which received a regulatory approval in May 2007 to start Sharia-compliant banking, last week reported a 16.2% jump in quarter-three net profit to Sh74.4 million. FCB is one of four banks that recently announced staff cuts as a reaction to the biting interest regulations on loans and deposits. The other three banks are Sidian Bank, Family Bank and Ecobank.
Djibouti expects to see new entrants in its Islamic finance sector and the government plans to work on a framework to allow the use of Sukuk, or Islamic bonds, to fund infrastructure projects, its central bank governor said.
Djibouti, a country of less than a million people located on the Horn of Africa, is a relative newcomer to Islamic finance, having introduced sector-specific legislation in 2011, but authorities hope it can increase banking penetration in rural areas while also attracting foreign investment.
The government has established a national Sharia board to help oversee the sector, appointing five members to the independent body last week, central bank governor Ahmed Osman said in an interview.
The move could help Islamic finance by improving consumer perception of the industry and providing greater clarity on contracts which follow religious principles such as bans on interest and gambling. The government is in discussions with the Saudi-based Islamic Development Bank to secure a technical mission to help establish a framework to issue sukuk.
Islamic banks are gradually embracing socially responsible finance, from renewable energy to microfinance efforts, helping unlock new funding sources for environmentally-friendly projects, an industry survey shows. The two sectors have developed separately from each other, but green projects could benefit from tapping Islamic banks in countries like the United Arab Emirates and Malaysia, where they now hold a quarter of total banking assets.
Around two-thirds of financing in Saudi Arabia follows Islamic principles, which forbid investing in gambling, tobacco and alcohol. This resembles the screening methodology used by ethical funds in Western markets. Green finance is increasingly important for Islamic banks seeking to differentiate themselves from their conventional peers, the Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) said in a report.
The Islamic Corporation for the Development of the Private Sector (ICD), a development finance institution of the Saudi Arabia-based Islamic Development Bank (IsDB) and the Caisse des Dépôts et Consignations Deposit (CDC), a financial institution backed by the government of Gabon, recently announced that they have signed a memorandum of understanding for the creation of a private equity fund to support small and medium-sized enterprises (SMEs) in Gabon and elsewhere in Central Africa.The goal of the fund is to foster the growth of SMEs that have been ill-served by banks and thus to grow the region’s economy as a whole.
As of October 13, 2015, ICD reported total assets of USD 1.7 billion and annual income of USD 97 million. No financial information for CDC is available. CDC has a balance sheet of XAF 195 billion (approximately USD 315 million).
Nigeria-based Jaiz International Bank has won three awards at the 6th Global Islamic Microfinance Forum (GIMF) organised by Centre of Islamic Banking and Economics in Nairobi, Kenya. The organisation and its associated institutions, Jaiz Charity and Development Foundation, Jaiz Takaful Insurance, Jaiz Zakat and Waqf Trust Fund won the awards. The awards are Lifetime Achievement Award bestowed on the Chairman of Jaiz Foundation, Alhaji Umar Abdul-Mutallab, CON; Best Corporate Social Responsibility Award to Ambassador Adamu Babangida Ibrahim, Director General/CEO, Jaiz Charity and Development Foundation and The Best Rising Islamic Microfinance Personality Award was awarded to the Managing Director of Jaiz Takaful Insurance, Mr. Momodou Musa Joof.