IslamicFinance.de

North Africa is moving towards the development of the Islamic financial industry as a response to the protests in several countries of the Arab world. Although there are some difficulties to overcome like low banking penetration and limited development of retail banking in general, there ist still potential for growth and progress. However, until a more stable political environment is provided, Shari'ah-compliant banking will be a niche market in North Africa.

Approximately US$10 million were stolen from the vault of the International Bank for Trade and Finance (IBTF) in Damascus on January 17. According to the bank's chief executive Sultan Al Zobi, the management only discovered the robbery on the following Sunday. He also added that a bank employee was believed to be involved in the raid. IBTF notified the authorities, an investigation is under way.

The Egyptian Finance Ministry will start its Sukuk issuance project in the last quarter of the current fiscal year. The project for financing economic and social projects will help to curb budget deficit. For Sukuk issuance, a central Sharia panel of seven members will be formed. The premier will be responsible for the appointment of the panel members.

Without contradicting the values and practices of Islamic banking, a new regulation is awaited for the Islamic banks. The goal of the legislative reform is to make tools for growth available. This regulation would force non-Islamist banks to comply to the same laws and standards of Islamist banks.

The conference titled "Arab Youth & Entrepreneurship: Holistic Approaches to Nurturing Local Ecosystems", which will take place on February 16-18, 2013 in Doha, Qatar, will focus on creating economic opportunities for young people in the Middle East and North Africa. Issues to be addressed include gender issues and job creation for low-income groups. The organizer of the conference is the MENA Child and Youth Program of the Arab Urban Development. The registration is free of charge and all sessions will be simultaneously available in Arabic and English.

EFG-Hermes Holding SAE (HRHO) said its sale to Qatar’s QInvest LLC has been delayed because of regulatory approvals. This is because the Egyptian Financial Supervisory Authority hasn’t yet approved the transfer of EFG-Hermes’ Egyptian assets to the new, Qatari-based entity. QInvest will invest $250 million in the venture, with the option to buy total ownership.

The Egyptian cabinet last week approved a draft law that would allow the government to issue Islamic bonds. The bill divides government assets into “publicly owned by the state" and "privately owned by the state". Only the first type of asset is allowed for sukuk. However, the bill does not describe the two types, a fact that is already causing controversy. The bill is still to be reviewed by the upper house of parliament and religious scholars at the Al-Azhar university.

15 Egyptian power stations have ceased to produce electricity due to fuel shortages. That is why Egypt is turning off half its streetlights in order to save 700 MW. This move is a follow-up to a previous initiative, by requirement of the government, shops and restaurants closed earlier. Even though the closing time rules did not enjoy popularity among most of the public, they went into effect in December 2012.

Islamic finance is growing at a 20% per year rate which contrasts with what conventional banking is currently most famous for - scandals, huge pay offs and bonuses. Even non-Muslims are attracted to Islamic finance which led to the fact that numerous countries have adopted and accepted this financial model. It is obvious that there is a huge economic benefit to be sought from it due to the enormous potential of the branch. Malaysia seems to be the leader in the Islamic finance market, developing by leaps and bounds.

In a report titled "The growing crisis of affordable housing in MENA" Ernst & Young explain that the growing crisis of affordable housing can be fought if regional governments involve the private sector in the matter. Even though a number of countries in the MENA region have made commendable efforts, affordable housing is still far from enough and the demand is continuously rising. The government is not able to deal with the issue of supplying affordable housing on its own. That is why both supply-side and demand-side strategies should be used to mobilize the private sector and thus expand government resources.

According to Minister of Finance Al-Morsy Hegazi, Egypt is now looking for a way to change the economic reform plan in order to obtain thr IMF $ 4.8 billion loan. He further added at a meeting with the Bank Group Chairman Ahmed Mohammed Ali that a few domains of cooperation between both sides will eventually be able to ease the burden off the country's budget. Several Egyptian projects will be financed by the Bank under different systems.

Galal Amin - author of Whatever Happened to Egyptians and prominent economist - expressed his doubtful attitude towards the new sukuk introduced by the government of Egypt. At a media roundtable held at the American university in Cairo (AUC) on Wednesday, Amin as well as some other experts in economy diagnosed the Egyptian economy and cast their predictions for the current year. It was said that due to political causes of the economic crisis it is difficult to make predictions. Especially the lack of security, a lack of trust and above all the nature and content of political discourse bringing Egypt far beck were mentioned as key factors.

According to the finance minister of Egypt, the cabinet has given its approval of a draft law to allow sovereign sukuk. Thus, the government is looking for new ways to finance an unsustainable budget deficit. It is expected that there will be strong demand for Islamic bonds. The Islamic Development Bank recently announced that it could be ready to buy around $6bn of them.

According to research by Kuwait Finance House, the total of sukuk issuance by end of 2012 has amounted to $131bn. This is an increase of 54% compared to 2011. The total sukuk issuance in December is $8bn marking a 61% increase in comparison with the previous year. Malaysia is the country which issued the most sukuk, followed by Saudi Arabia, the UAE, and Indonesia.

Nakhweh in Jordan works in the field of social entrepreneurship; seeking as NGO trying to make volunteerism popular (or at least simple) for Jordanian youth. Now, the site is pivoting into an entirely new era, relaunching as a comprehensive directory for social work in the Middle East and North Africa.

Under its Organizations tab, the site will list all social ventures (including NGOs, nonprofits, social enterprises, and initiatives) in a searchable list, while still offering its signature volunteer matching services.

The euphoria of the Arab Spring has turned to disappointed expectations because building Arab democracies with open economies has proved to be much harder than expected. Countries like Tunisia, Egypt and Libya are stuck in a situation of instability which hampers economic recovery. Meanwhile, lack of growth and jobs nurtures instability. If the vicious circle is not broken, it is highly probable that radical Islamists will become more active. Thus, modernity would be rejected and a relapse to the corrupt crony-state systems would threaten to become reality. That is why an altered mini-version of the Marshall Plan could play the role of the necessary bigger and more focused effort.

According to a statement by Prime Minister Hisham Qandil, Egypt will not use the Suez Canal or other state assets to back sukuk issues. The use of public assets such as the Suez Canal and public facilities for the issuance of instruments is excluded by the bill, which has been intensively discussed recently. Since Islam forbids interest payments, bonds must be backed by specific assets and pay investors with revenue from those assets. However, the Islamic Research Academy insists that the bill could allow authorities to abuse their control of public assets.

The Egyptian General Petroleum Corporation (EGPC) received $265 million of funds from the International Islamic Trade Finance Corporation (IITFC). Since October 2012, the money provided to the EGPC from the IITFC has almost reached the $500 million mark. The funds are intended to help the state to secure a larger number of basic goods and other necessities for its citizens. The initiative includes petroleum products, wheat and other foodstuffs.

The decision of the Islamic Research Academy of al-Azhar to reject the Ministry of Finance's bill on Islamic bonds was supported by the Shura Council (SC) Economic Committee. A member of the SC explains that the reason therefore is the lack of legitimate aspects. Meanwhile, al-Azhar Grand Imam Ahmed el-Tayyeb recently referred a new draft law on Islamic Sukuk so that al-Azhar's Senior Scholars Council can express their opinion on it.

The final draft of Egypt's sukuk law has been submitted to the finance ministry. It will now be xamined by parliament according to the head of the Egyptian Financial Supervisory Authority (EFSA) Ashraf ElSharkawy. According to ElSharkawy, the goal of the government was social dialogue with political parties and economic associations rather than the EFSA. He further made clear that the sovereign sukuk law released by the government is designed to organise the financing of the government, state budget, national projects and public institutions.