Islamic Finance News

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AFRICA : AN UNCERTAIN FUTURE? As the global economy experiences unprecedented shifts, Africa�s time to shine draws closer. Economic pundits are ready to place their bets on this emerging market despite decades of civil unrest, tribal clashes and political and economic turmoil overshadowing this vast and ancient continent�s true economic potential. Although still unable to free itself from the shackles of corruption and poverty, a self-perpetuating cycle, the success of the African economy currently rests on its ability to attract multinational corporations and foreign direct investments from Asia and Europe. Over the last ten years, trade between African countries and the rest of the world has grown significantly; charting a 170% increase in trade with the GCC, and 45% growth with China and India, currently the world�s fastest growing economies. Chinese investors have expressed considerable interest in Africa, and are already heavily invested in manufacturing and infrastructure projects in countries such as Sudan and Ghana. In places such as Ethiopia and Ghana, over 60% of Chinese investments in the countries constitute manufacturing. And the Chinese government is keen to see these numbers grow, having recently pledged an additional US$20 billion to the African economy over the next three years with an eye to developing infrastructure, agriculture and the development of small businesses. Ranked as the poorest continent in the world, Africa has posted strong growth rates in recent years, second only to Asia, drawing increasing inward investment and giving rise to talk of its economic resilience, accompanied by much self-congratulation among officials. However, despite a projected GDP of 4.5% this year, a much more optimistic prospect compared to the debt-ridden economies of the west, industry players warn that the continent should not take a backseat in terms of creating opportunities for trade and investment. View interactive book View PDF Edition

CONTENTS COVER STORY Africa: An Uncertain Future? Africa is once again in the spotlight as trade revenues increase, Sukuk aspirations resurface, and talk of Islamic finance regulations resonate. However despite the optimism and enthusiasm, the future of Islamic banking in the world�s most Muslim-dominated continent is still under question. FEATURES Trade Finance: An emerging sector With enormous potential in the areas of infrastructure development, manufacturing and agriculture financing, all eyes are on Africa as the new hub for Islamic trade finance. Stalled Sukuk The last two years have seen unprecedented interest in creating an Islamic capital market via the issuance of Sukuk in Nigeria, Kenya, South Africa and Senegal. However, only two countries across the African continent have successfully issued Sukuk - Sudan and Gambia. From North to South: An overview of the African funds industry Africa has emerged as one of the most vibrant markets to embrace Islamic finance in recent years. From the north in Egypt (which was the birthplace of the first modern day Islamic bank) right down to South Africa, regulators and market players have taken numerous initiatives to attract Islamic investors to their respective countries. Takaful: A long way to go Although not a new concept for the continent, Africa is considered a market rife with potential and untapped opportunities in the realm of Islamic insurance. CHAPTERS Islamic Finance on the African Continent The presence of Islam in Africa dates back to the seventh century when the Prophet Muhammad advised some of his followers who were facing persecution to travel across the Red Sea to the safety of Abyssinia (now Ethiopia). Sub-Saharan Africa: Building Confidence in its Opportunity The creation of International Islamic Trade Finance Corporation (ITFC) was necessitated to respond to the persistent expectations to increase intra-trade within the Organization of Islamic Cooperation (OIC) member countries which despite discernible growth in the recent past continues to fall short of the desired level.