IslamicFinance.de

The growth in Sukuk’s popularity can be traced back to the global financial crisis in 2008. Since then, several sovereign and sub-sovereign bonds were issued under Islamic principles. In Africa it is Kenya that has commited to positioning itself as a regional Islamic finance hub. Finance Minister Henry Rotich outlined the steps as part of the country’s 2017/2018 budget aiming to level the playing field between Islamic and interest-based transactions. The primary objective is to prepare the groundwork for a sovereign sukuk but also to attract corporate sukuk from the region. Nigeria’s seven-year N100bn Sukuk bond offers an avenue for a competitive alternative to the conventional banking system and a path towards sustainable economic recovery.

Islamic insurance services were formally launched yesterday in Kano, Nigeria. The launching ceremony of Jaiz Takaful Insurance was held at the premises of the palace of the Emir of Kano. The managing director of Jaiz Takaful Insurance, Mahmud Moussa Joof disclosed that the sector has currently recorded 25 to 35% global growth. He added that Takaful insurance was open to everybody as against contrary insinuations from certain quarters. At the ceremony, the Emir of Kano, Muhammad Sunusi II lamented over the faulty payment system by insurance service providers in Nigeria. The Emir urged operators of the Islamic Insurance business to be honest to Kano people, while urging Kano people to form cooperative groups to access the Islamic insurance services, affirming that, subscribing to insurance services is permissible in Islam.

Regarding its economic situation and the quest for a solution in Nigeria, Islamic Finance is believed to be able to redeem it because of the ethical and moral values within the Islamic banking system.
Alhaji Sulaimon Yusuf, who spoke at the Muslim Association of Nigeria 34th Triennial National Conference in Lagos, said that Islamic finance is playing an important role in promoting socially desirable investments, economic empowerment, employment opportunities and resuscitation of real sector of economy. Further he said: "We have confidence in the economic packages and policies of the present administration and feel that a lot more needs to be done to alleviate the suffering of the masses"

Tajudeen Yusuf, President at the Institute of Islamic Finance Professionals (IIFP), has advised parents to encourage their children to study Islamic finance. Yusuf gave the advice on Sunday at the 34th Triennial Conference of the Muslim Association of Nigeria (MAN). The theme of the national conference was "Path to National Economic Recovery, Growth and Development – The Islamic Perspective". According to Yusuf, Islamic Finance helps to redistribute wealth and reduce income inequality, as well as promotes inclusiveness through stakeholders participation. At the conference a new national executive was elected to run the affairs of the organization for the next three years. They include Alhaji Tajudeen Ojikutu (President), Dhikrullah Yagboyaju (Vice President), Ganiu Salawu (Secretary) and Nurat Adebayo (Public Relations Officer).

In this interview the Managing Director of Jaiz Bank, Hassan Usman, speaks about Islamic banking in Nigeria. One of the main challenges is the high operating cost of banks, but Jaiz Bank managed to grow to a national bank. Starting in 2012 with only three branches, the bank expanded to 30 branches all over the country. The Nigerian government recently issued a N100bn Sukuk bond and Jaiz Bank was part of the process from the inception. The proceeds of the Sukuk will be dedicated to building roads across the country. Sukuk can ensure that projects are managed properly and there is no diversion. In terms of profitability, Jaiz Bank made profit in 2015 and even in 2016 in spite of the difficulty witnessed in the economy. According to Usman, 2017 looks even better because the fundamentals have started to improve and so the bank's performance will follow the trend of improved fundamentals.

The Bank of Tanzania has come in motion in order to prevent a possible run on deposits at the sharia-compliant Amana Bank. This happend after reports went publich on social media of the financial institution's imminent closure.
Bank of Tanzania‘s Governor Florens Luoga stated that Amana Bank and other lenders were very stable and there was really no reason for panic over deposits. He confirmed that the bank is continueing with normal operations, and warned anyone speading false information about the future of some banks, including Amana. In these cases stern legal action would be taken. Additionally the Head of marketing and business Dassu Mussa said Amana Bank has sufficient liquidity. "All we can do is to make sure that our business is running efficiently and properly and we are very confident it is doing so."

Nasdaq Dubai and the Nairobi Securities Exchange have signed a Memorandum of Understanding (MoU) to facilitate the creation of a Sukuk sector in Kenya. The MoU was signed in Dubai by Hamed Ali, CEO of Nasdaq Dubai, and Geoffrey Odundo, CEO of the Nairobi Securities Exchange. Hamed Ali assured that by cooperating and sharing expertise, the two Exchanges will provide powerful support for the growth of Islamic finance in Kenya. Geoffrey Odundo said the development of the Islamic capital markets can provide significant support for funding national development while strengthening international relationships. Other recent steps for the sector include a Sukuk transaction on Nasdaq Dubai’s Murabahah financing platform carried out by the Africa Finance Corporation.

The Islamic Corporation for the Development of the Private Sector (ICD) and BSIC Niger have entered into an agreement to finance SMEs in Niger. The line of financing agreement was signed for the amount of €9m under the Wakala structure. The collaboration will focus on developing SMEs, improving the living standard of the population by creating jobs, generating tax revenues for the government and promoting Islamic Banking in the country. Abakar Adoum, Managing Director of BSIC, said the signing of the agreement marked the beginning of a lasting partnership and SMEs will enjoy a mentoring that meets their needs at acceptable costs. SME clients will get access to a a 5-year line of financing. Adoum believes that other forms of partnership, like the opening of an Islamic window, will also develop in the near future.

Le Global Islamic Finance Award, remis le 6 septembre au président Ismaïl Omar Guelleh, récompense la formidable croissance de la finance islamique à Djibouti. Depuis la libéralisation du secteur bancaire, en 2006, les trois acteurs du pays, Saba Islamic Bank, Salaam African Bank et East Africa Bank, sont parvenus à s’octroyer 25% des comptes et 21% du total des actifs de la place. En 2016, pour veiller à la régularité des produits financiers, le pays a d’ailleurs installé un Comité national de la charia. Depuis six ans, la Banque centrale de Djibouti organise le grand rendez-vous africain de la finance islamique, l’International Islamic Banking Summit in Africa (IIBSA), dont la prochaine édition aura lieu en 2018.

A joint initiative of the African Development Bank (AfDB) and the Islamic Development Bank (IsDB) will boost agriculture and enhance drought resilience in Nigeria, Somalia and Uganda. Stronger ties between the two banks will help ramp up agricultural production along important crop and livestock value chains. For example, in Nigeria the Plateau State Potato Value Chain Support Project of the AfDB and the planned IsDB’s Agro Pastoral Development Project in Kano State will promote higher household incomes through productive agro-pastoral activities. In Somalia, AfDB’s Say No To Famine project is providing emergency assistance support and facilitating drought resilience building through the restoration of community assets.

Acccording to Jaiz Bank CEO Hassan Usman, more West African countries and companies are likely to adopt Sukuk to finance infrastructural development and corporate growth plans. He said the envisaged passion for Sukuk issuance in the near future could make the non-interest capital market grow bigger and faster than its conventional counterpart. Nigeria recently issued its maiden sovereign Sukuk and successfully raised N105bn for its N100bn Sukuk, raising optimism on the depth of the market. Usman added that Islamic banking had a lot of potential due to the economic growth in many West African nations supported by improving fundamentals, growing domestic demand and stronger regional integration.

To confute speculations about the N100 billion Sukuk, the Nigerian government said the money was intact in the appropriate account opened for it at the Central Bank of Nigeria. The Minister of Finance, Kemi Adeosun, earlier said the fund will be used to finance the construction of 25 key road projects across the county’s six geo-political zones. She said each of the zones was to benefit about N16.67 billion for road projects in their respective domains. After a month no money has been disbursed to contractors to start the construction works, which fuelled speculation that the money may have been diverted by the government. Director of the Debt Management Office, Patience Oniha, said the Sukuk was not available to government for general spending purposes, but went directly into the account opened for it. Although she did not say the exact time the process for the disbursement will be completed, she assured that once the contractors fulfil the requirements, the disbursement of the money would commence.

Many West African countries and companies may fall back on Sukuk to finance infrastructural development and corporate growth plans. Managing Director of Jaiz Bank, Hassan Usman, said there could soon be a frenzy of the facility issuance in West Africa. Nigeria recently issued its maiden sovereign Sukuk. It successfully raised N105 billion for its N100 billion Sukuk. Usman added that with a population of about 329 million people, the emerging middle-class segment of the region is expected to boost demand for retail banking, takaful and Islamic funds. According to him, as the market for Islamic Finance develops in Nigeria, each segment of the market will provide potential career paths for young and middle-level professionals. He also noted it might take some time because the ecosystem is currently narrow with only one full-fledged bank, one window operation, one capital market operator and two Takaful operators.

#Kenyan operator Safaricom and Gulf African Bank are set to launch a Sharia-compliant banking service through M-Pesa to allow customers to open and operate M-Sharia bank accounts. The M-Sharia platform will be rolled out by next March, targeting the bank’s retail and merchant segments. Retail customers will be able to borrow cash through their mobile phones from as little as KES 100 to KES 200,000. Merchants will have a chance to buy stocks by borrowing through that platform from KES 50,000 to KES 500,000. The tenor for the retail service will be thirty days, while that for merchants will be three months.

The Emir of Kano, Muhammad Sanusi II, is expected to launch Kano branch of Jaiz Takaful Insurance on Monday 30th October, 2017. Jaiz Takaful's CEO Momodou Musa Joof said the company would tap Emir Sanusi’s royal blessing to improve on insurance penetration in Nigeria and Kano in particular. The ceremony which will partly feature parley between the top management officials of the Company and Kano business communities and associations, would have the Company’s Board Chairman, Dr. Umaru Abdul Mutalab as a special guest.

The Islamic Development Bank (IDB) has approved a multi-million-dollar package of financing to boost infrastructure investments in seven African nations. Burkina Faso, Cote d’Ivoire, Senegal, Mali, Guinea, Tunisia and Suriname will benefit from a share of the total $805 million deals for investments in energy, housing, agriculture and water supply. IDB president Dr Bandar Hajjar signed the agreements with the finance ministers of the beneficiary countries. Cote d'Ivoire will receive $265m for the Cocody Bay project and vocational training. Mali will receive $166m for the country’s Sirakoro power plant project and Burkina Faso will receive $104m for a power project. Guinea is to receive $16m for a rural water supply project and Tunisia will receive $80m for agricultural development. Senegal and Suriname will receive a total of $173 for housing projects.

First National Bank of #Botswana is re-launching products and service offering to the local Muslim community. Held at the Travel Lodge Conference Centre in Gaborone, the re-launch seeks to sensitize patrons and attract new customers. FNB Botswana CEO, Steven Bogatsu, said the re-launch has been long coming since the product was launched ten years ago in 2007. According to FNBB Islamic Banking Representative, Tahera Mhaisker, the offered services encompass transactional banking, vehicle and asset financing, as well as property finance for both residential and commercial properties. Mhaisker added that the re-launch was the culmination of an exciting journey for the bank.

The Malawi government has approved to embrace the Islamic banking system, however not through fully fledged Islamic banks, but through the "window model" only. According to Reserve Bank Governor Dalitso Kabambe, bank supervisors will shortly be engaging with each bank to prove guidance on reporting requirements of Sharia-compliant products and services. Kabambe promised that as soon as the guidelines are developed, they will be shared with each bank. In relation to this, the Muslim Association of Malawi recently invited an expert in Islamic Finance who facilitated the meeting. The South African Mufti, Ismail Ebrahim Desai, a renowned scholar in Islamic Finance advised the government on issues of proper regulation and supervision.

Nigeria’s government launched a 100-billion-naira debut sovereign sukuk on the domestic market. According to the Debt Management Office, the sukuk was oversubscribed by 5.8%. The bond is structured as a lease and guaranteed by the government of Nigeria. The seven-year Islamic bond fetched 105.87 billion naira in subscription from retail and institutional investors.

#Nigeria's Federal Government successfully concluded the issuance of N100billion sukuk on Friday, but the issuance has divided the country along religious lines. The Christian Association of Nigeria (CAN) described the issuance as a subtle attempt by the Federal Government to Islamise Nigeria. Therefore, the body called on the government to abrogate the laws and framework behind the sukuk. But in its reaction, the Nigerian Supreme Council for Islamic Affairs (NSCIA), accused CAN of Islamophobia. NSCIA then appealed to CAN to tread the path of honour and refrain from statements causing disaffection and promoting disharmony that may lead to conflict in the country. According to Dr. Benedict Nwafor of the University of Lagos, for Nigeria sukuk is an opportunity for raising funds without raising the nation’s debt profile. Nwafor is of view that sukuk certificates can transfer state-owned projects to sukuk holders in case of default. He added that the government has to sort out clearly the scenario for a default and needs to educate the public on the benefits of sukuk.