Africa is expected to see a massive
population boom, many of whom will grow up Islamic. As such, demand for Islamic
products and services on the continent are expected to rise in the coming
years. Financing projects through Islamic financial instruments has massive
potential within the African region. One such instrument is sukuk, which is a
form of bond between the issuer and issuee, whereby risks are shared, while no
interest is charged on the issued amount. This is beneficial to projects that
require long term financing.
The ‘Islamic
economy’ refers to a wide range of commercial activities and geographies that
span the world. Islamic derived Sharia-compliant bonds, halal food, travel and
fashion all make up components of the wider global market that spans from Niger
to the financial centres of Kuala Lumpur, which was valued at $3.6 trillion in
2013. The Islamic finance side of the equation was in 2014 valued at $1.8
trillion by BearingPoint, and is project to grow to $3 trillion by 2018.
Recent
research by the Economist Intelligence Unit (EIU), a consultancy that provides
business analysis for decision making, concerns itself with the value of
Islamic financial propositions for both the Islamic and non-Islamic players in
the Sub-Sahara African region. The EIU research report, titled ‘Mapping
Africa’s Islamic economy’, was commissioned by the Dubai Chamber and used desk
research and interviews with experts as its basis.
(Consultansy.UK / 04 January 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com