A unified regulatory treatment for the Islamic capital market in West Africa is in the offing as the West African Monetary and Economic Union (WAEMU) prepares to consult the market on its proposed framework this week. VINEETA TAN writes.
IFN understands from the Regional Council for Public Savings and Financial Market (CREPMF) — the unit within WAEMU responsible for regulating and supervising operators in the regional financial market — that it will conduct a public hearing in collaboration with UK-funded specialist development agency Financial Sector Deepening Africa (FSD Africa) on the dedicated regulations on the 24th February.
Engineered by UK-headquartered Islamic Finance Advisory & Assurance Services and US-based Kramer Levin, the Islamic Capital Market Framework has been adapted to support Shariah compliant financial instruments in the region, which has seen about US$1.5 billion raised through the Islamic capital market to date.
WAEMU comprises eight member states: Benin, Burkina Faso, the Ivory Coast, Mali, Niger, Senegal, Togo and Guinea Bissau.
“Indeed, in view of the increasing financing needs of states and enterprises, WAEMU authorities have decided to consider other financing alternatives such as the Islamic finance industry,” CREPMF and FSD Africa noted in a joint statement. The public is invited to join the hybrid public hearing which will be available to virtual and in-person attendees.
With a booming population and an expanding economy, West Africa holds tremendous investment and growth opportunities.
The region, however, is held back by market inefficiencies resulting in uneven development and pervasive poverty.
The region nonetheless has seen sporadic Islamic finance developments over the years and WAEMU intends to harmonize and support the growth of Islamic finance. Apart from this Islamic capital market framework, the Central Bank of West African States is also working on a banking regulatory framework.