Standard & Poor’s Ratings Service has encouraged Nigeria and some countries in Africa including Cote d’Ivoire and Kenya to give favourable consideration to the development of Islamic finance industry, saying this could help Africa fund its significant infrastructure needs.
Given the growing interest in Islamic finance and the fact that these countries have fairly well developed capital markets by regional standard, S&P credit analyst, Ms. Samira Mensah, said she believes the government will issue sukuk in the near future.
In a new report titled “Regulations and Fiscal Incentives Could Speed Islamic Finance Development in Africa” development of an Islamic finance industry in Africa could help plug the regions large infrastructure gaps over the coming decade.
The rating agency said the involvement of major multilateral institutions could accelerate the development of African sukuk issuance.
However, the organisation noted that the governments will take time to introduce new regulation and fiscal adjustments to foster African sukuk markets, increase investment options for potential investors, and attract a pool of Islamic liquidity.