AfDB and IILM Strengthen Cooperation to Mobilize Resources On Islamic Finance Markets
The African Development Bank (AfDB) Operations Vice-president, Zondo Sakala and the CEO of the International Islamic Liquidity Management Corporation (IILM), Rifaat Abdelkarim, on 24 June 2013 in Tunis inked a Memorandum of Understanding (MoU), to build robust partnership to promote liquidity management. This MoU signing comes on the heels of the AfDB's new trust fund reform policy, shifting from bilateral to multi donor and thematic trust fund.
The MoU will offer some direct benefits to the AfDB and its Regional Member Countries (RMCs). These include mobilizing finance and diversifying AfDB's funding base using investment bonds, called 'Sukuk'. The benefits also include building knowledge and capacity in RMCs in the field of Islamic finance, especially in fragile states and transforming them into productive capital. The Bank will also use the 'Sukuk' to circumvent issues of debt sustainability in RMCs.
Vice-president Zondo Salaka urged the two parties to move fast and establish a joint AfDB-IILM technical team working group to go into details of the partnership. He also expressed the hope that through IILM, the Bank can explore working with member countries of IILM. "We hope this signing will follow with concrete actions on the ground," he stated.
Abdelkarim, for his part, said that the signing of "this MoU with the AfDB would enable the two institutions to join hands to enhance Africa's development." "I am proud and privileged to sign the MoU with the African Development Bank," he affirmed, adding that "the MOU would be followed by practical case for us to work together."
About International Islamic Liquidity Management Corporation
The International Islamic Liquidity Management Corporation (The IILM) was established on 25 October 2010 by central banks, monetary authorities and multilateral organizations. It has its headquarters in Kuala Lumpur, Malaysia. It aims to develop and issue short-term Shari'ah-compliant financial instruments to facilitate effective cross-border liquidity management for institutions that offer Islamic financial services (IIFS). By creating more liquid Shari'ah-compliant financial instruments for IIFS, the IILM will enhance cross-border investment flows, international linkages and financial stability.
The current members of the IILM Governing Board are the central banks and monetary agencies of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey, the United Arab Emirates and the Islamic Development Bank Group. Membership of the IILM is open to central banks, monetary authorities, financial regulatory authorities or government ministries or agencies that have regulatory oversight of finance or trade and commerce, and multilateral organizations.