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Saturday, 20 February 2016

Nigeria sets up committee to advise on first sovereign sukuk

In a bid to explore alternative funding sources, Nigeria's government has set up a committee to advise on issuing the country's first sovereign sukuk.

Africa's biggest economy plans to borrow as much as $5 billion to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira.

Any time from the first week of March, the committee is expected to submit its report
Securities and Exchange Commission (SEC) spokesman Nalf Abdusalam said the new committee, including officials from the Debt Management Office (DMO), would advise on the amount to be raised, the timing and jurisdiction of the issue. "Any time from the first week of March, the committee is expected to submit its report," he said.

Islamic banking assets globally now exceed $1 trillion and could reach $4 trillion by 2020, analysts say.

Nigeria has asked the African Development Bank for a $1 billion budget support loan and has held "explanatory talks" with the World Bank.

Issuance of a sovereign sukuk is part of a strategic plan developed by the DMO three years ago to develop alternative sources of funding and to establish a benchmark curve for corporates to follow.

In 2013, Nigeria's Osun State issued 10 billion naira ($62 million) of sukuk, but no other sukuk transactions have followed.

Nigeria is home to the largest Muslim population in sub-Saharan Africa, with about half of its 160 million people members of the Islamic faith. It is also home to one of Africa's fastest growing consumer and corporate banking sectors.

In January, the DMO and SEC agreed to work on a debut issuance of sovereign Islamic bonds (sukuk) before the end of the year.

(The African Report / 19 February 2016)
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American students schooled on Islamic Finance

Emirates Islamic Bank recently invited university students from the US for a cross-cultural learning programme to get familiarise with the world of Islamic Finance.
The visit were part of a study programme organised by Miami University of Ohio and the University of Minnesota's Carlson School of Management, and was designed to increase the student's understanding of conducting business in the GCC.
During the visit, the bank provided the students an introduction into the basic principles of Islamic Finance, and offered insights on the increasing importance of Islamic Finance on the global financial system, as well as the bank's role in the UAE economy.
"Over the years, Emirates Islamic Bank has taken the lead in raising awareness on Islamic banking, as a core component of our commitment to widen Islamic banking's reach," said Emirates Islamic Bank CEO Jamal Bin Ghalaita.
"Continuing with our outreach campaign, we are delighted to welcome this group of students from USA and we look forward to interacting with more students from the UAE, GCC and across the world."

"Islamic banking assumes increasing relevance today as global financial markets experience challenges making it important for students, future policy makers and business owners to be educated on the principles of Islamic Finance," he added.

(Khaleej Times / 19 February 2016)
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