Islamic finance in Africa to grow as #sukuk issuance strengthens- Moody’s

According to Moody’s Investors Service, Africa’s Islamic banks will continue to perform well and African sukuk issuance will keep expanding steadily. In October and December last year, the governments of Morocco and Nigeria issued $105 million and $327 million of sukuk. In Morocco it was an inaugural issuance and the transaction was 3.6 times oversubscribed. According to the rating agency, structural constraints that have prevented sukuk markets from developing still remain. These constraints include the legislative complexity and time associated with sukuk issuance, especially for new issuers, and the need to identify physical collateral to support the sukuk structure. Moody’s expects robust issuance in African sukuks over the next 18 months. Egypt, Algeria and Sudan have recently expressed interest in issuing sukuk.