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
Islamic Investment Malaysia: www.islamic-invest-malaysia.com