Africa

W’Africa to see more #Sukuk bonds – Usman

Acccording to Jaiz Bank CEO Hassan Usman, more West African countries and companies are likely to adopt Sukuk to finance infrastructural development and corporate growth plans. He said the envisaged passion for Sukuk issuance in the near future could make the non-interest capital market grow bigger and faster than its conventional counterpart. Nigeria recently issued its maiden sovereign Sukuk and successfully raised N105bn for its N100bn Sukuk, raising optimism on the depth of the market. Usman added that Islamic banking had a lot of potential due to the economic growth in many West African nations supported by improving fundamentals, growing domestic demand and stronger regional integration.

EXCLUSIVE: #SUKUK funds intact; Why we have not paid contractors – Nigerian govt

To confute speculations about the N100 billion Sukuk, the Nigerian government said the money was intact in the appropriate account opened for it at the Central Bank of Nigeria. The Minister of Finance, Kemi Adeosun, earlier said the fund will be used to finance the construction of 25 key road projects across the county’s six geo-political zones. She said each of the zones was to benefit about N16.67 billion for road projects in their respective domains. After a month no money has been disbursed to contractors to start the construction works, which fuelled speculation that the money may have been diverted by the government. Director of the Debt Management Office, Patience Oniha, said the Sukuk was not available to government for general spending purposes, but went directly into the account opened for it. Although she did not say the exact time the process for the disbursement will be completed, she assured that once the contractors fulfil the requirements, the disbursement of the money would commence.

#Sukuk has great potential, says Jaiz Bank chief

Many West African countries and companies may fall back on Sukuk to finance infrastructural development and corporate growth plans. Managing Director of Jaiz Bank, Hassan Usman, said there could soon be a frenzy of the facility issuance in West Africa. Nigeria recently issued its maiden sovereign Sukuk. It successfully raised N105 billion for its N100 billion Sukuk. Usman added that with a population of about 329 million people, the emerging middle-class segment of the region is expected to boost demand for retail banking, takaful and Islamic funds. According to him, as the market for Islamic Finance develops in Nigeria, each segment of the market will provide potential career paths for young and middle-level professionals. He also noted it might take some time because the ecosystem is currently narrow with only one full-fledged bank, one window operation, one capital market operator and two Takaful operators.

Safaricom and Gulf Bank to launch Sharia-compliant banking service

#Kenyan operator Safaricom and Gulf African Bank are set to launch a Sharia-compliant banking service through M-Pesa to allow customers to open and operate M-Sharia bank accounts. The M-Sharia platform will be rolled out by next March, targeting the bank’s retail and merchant segments. Retail customers will be able to borrow cash through their mobile phones from as little as KES 100 to KES 200,000. Merchants will have a chance to buy stocks by borrowing through that platform from KES 50,000 to KES 500,000. The tenor for the retail service will be thirty days, while that for merchants will be three months.

Emir Sanusi to launch #Takaful insurance Monday

The Emir of Kano, Muhammad Sanusi II, is expected to launch Kano branch of Jaiz Takaful Insurance on Monday 30th October, 2017. Jaiz Takaful's CEO Momodou Musa Joof said the company would tap Emir Sanusi’s royal blessing to improve on insurance penetration in Nigeria and Kano in particular. The ceremony which will partly feature parley between the top management officials of the Company and Kano business communities and associations, would have the Company’s Board Chairman, Dr. Umaru Abdul Mutalab as a special guest.

Islamic Development Bank to finance African #infrastructure projects

The Islamic Development Bank (IDB) has approved a multi-million-dollar package of financing to boost infrastructure investments in seven African nations. Burkina Faso, Cote d’Ivoire, Senegal, Mali, Guinea, Tunisia and Suriname will benefit from a share of the total $805 million deals for investments in energy, housing, agriculture and water supply. IDB president Dr Bandar Hajjar signed the agreements with the finance ministers of the beneficiary countries. Cote d'Ivoire will receive $265m for the Cocody Bay project and vocational training. Mali will receive $166m for the country’s Sirakoro power plant project and Burkina Faso will receive $104m for a power project. Guinea is to receive $16m for a rural water supply project and Tunisia will receive $80m for agricultural development. Senegal and Suriname will receive a total of $173 for housing projects.

FNB re-launches 10-year-old #Islamic #banking offering

First National Bank of #Botswana is re-launching products and service offering to the local Muslim community. Held at the Travel Lodge Conference Centre in Gaborone, the re-launch seeks to sensitize patrons and attract new customers. FNB Botswana CEO, Steven Bogatsu, said the re-launch has been long coming since the product was launched ten years ago in 2007. According to FNBB Islamic Banking Representative, Tahera Mhaisker, the offered services encompass transactional banking, vehicle and asset financing, as well as property finance for both residential and commercial properties. Mhaisker added that the re-launch was the culmination of an exciting journey for the bank.

#Malawi approves #Islamic #Banking, Sharia-compliant services

The Malawi government has approved to embrace the Islamic banking system, however not through fully fledged Islamic banks, but through the "window model" only. According to Reserve Bank Governor Dalitso Kabambe, bank supervisors will shortly be engaging with each bank to prove guidance on reporting requirements of Sharia-compliant products and services. Kabambe promised that as soon as the guidelines are developed, they will be shared with each bank. In relation to this, the Muslim Association of Malawi recently invited an expert in Islamic Finance who facilitated the meeting. The South African Mufti, Ismail Ebrahim Desai, a renowned scholar in Islamic Finance advised the government on issues of proper regulation and supervision.

#Nigeria's 100-bln-naira debut sovereign #sukuk oversubscribed by 5.8 pct -debt office

Nigeria’s government launched a 100-billion-naira debut sovereign sukuk on the domestic market. According to the Debt Management Office, the sukuk was oversubscribed by 5.8%. The bond is structured as a lease and guaranteed by the government of Nigeria. The seven-year Islamic bond fetched 105.87 billion naira in subscription from retail and institutional investors.

#Sukuk: Borrowing for development without fear of interests

#Nigeria's Federal Government successfully concluded the issuance of N100billion sukuk on Friday, but the issuance has divided the country along religious lines. The Christian Association of Nigeria (CAN) described the issuance as a subtle attempt by the Federal Government to Islamise Nigeria. Therefore, the body called on the government to abrogate the laws and framework behind the sukuk. But in its reaction, the Nigerian Supreme Council for Islamic Affairs (NSCIA), accused CAN of Islamophobia. NSCIA then appealed to CAN to tread the path of honour and refrain from statements causing disaffection and promoting disharmony that may lead to conflict in the country. According to Dr. Benedict Nwafor of the University of Lagos, for Nigeria sukuk is an opportunity for raising funds without raising the nation’s debt profile. Nwafor is of view that sukuk certificates can transfer state-owned projects to sukuk holders in case of default. He added that the government has to sort out clearly the scenario for a default and needs to educate the public on the benefits of sukuk.

Jaiz Bank: Balancing the Business and The Market

After the first tier commercial banks in Nigeria, Jaiz Bank was the most active stock on the exchange with volumes of 7,179,550 with a total value of N4,682,686.00. The increased activity is indicative of swinging sentiments in favour of the stock. But the stock has underperformed the All Share Index (ASI) in the last six months as it returned a negative 45% while the ASI returned 40%. Jaiz Bank managed to grow its Gross Income in the first half year ending June to N3.25 billion from N2.56 billion. Income from Finance Investment grew 19.82% to N2.95 billion from N2.46 billion while Sukuk leapt 198.3% to N293.35 million from N98.35 million. Abdulfatah Ahmed, the Kwara State governor highlighted there was a lot of scope for growth for the bank and Islamic banking in Nigeria. Hassan Usman, the bank’s managing director, said he was optimistic about the future of the bank and therefore urged everyone irrespective of their religious background to key into the model.

Jaiz Bank’s capital base hits N15bn

Jaiz Bank CEO Hassan Usman said that #Nigeria would become one of the countries to successfully offer Sovereign Sukuk in local currency. The Federal Government floated around N100bn and according to him, the offer was to last for five days. Hassan said these on the sidelines of Jaiz Bank’s Customers Forum in Ilorin, the Kwara State capital and also revealed that the institution’s capital base had reached N15bn. He said that Islamic finance worldwide was novel, being in existence for about 40 years compared to conventional banking, which had lasted for over 300 years.

FG starts pre-offer #road #show for #N100bn #Sukuk

In Lagos, the Debt Management Office started a national road show last week in preparation for the issuance of the much awaited N100bn non-interest bearing Sukuk bond.
The Office said in a statement, that the road show led by the Director-General, Ms Patience Oniha, would also be held in Kano, Kaduna and Port Harcourt. It said the team would be accompanied by its financial advisers, Lotus Capital Financial Services Ltd. and FBN Merchant Bank Plc.
The road show is to create awareness about the sovereign Sukuk and sensitise target investors about its features and benefits. The Office had announced its intention to issue a sovereign Sukuk in the domestic market as part of measures to fund the 2017 budget deficit.

Rise of #Islamic #finance meets #human #capital #gap

The strongly growing popularity of Islamic banking and Islamic finance and its increasing global spread has led to a considerable undersupply of talent in this sector. Both the Middle East and Southeast Asia, but also new regions currently adapting to the alternative finance system such as in Africa and Central Asia are effected.

Estimations are that there is a shortfall of between 8,000 and 10,000 in main Islamic finance fields in Gulf Cooperation Council countries alone, plus more in peripheral sectors such as law and regulatory affairs, financial technology, insurance and others. Altogether, as the industry continues to grow, at least 56,000 people will be needed to serve the Islamic financial sector in the coming years, according to the Finance Accreditation Agency of Malaysia.
“Islamic banking assets in six core markets – Qatar, Indonesia, Saudi Arabia, Malaysia, the UAE and Turkey – are estimated to reach a combined asset volume of $1.8tn by 2019,” says Dr. Amat Taap Manshor, the FAA’s CEO. “But the human capital meant to support the industry is still in its infancy, and shortages will be felt most acutely in the capital market sector,” he added.

#Nigerian Banks Should Embrace Islamic Finance, By Rafiq Raji

In August 2017, the Central Bank of Nigeria (CBN) introduced two liquidity management instruments for non-interest financial institutions, a Funding for Liquidity Facility (FfLF) and Intra-day Facility (IDF). In a February 2017 report, the IMF mentioned the lack of such sharp liquidity instruments as a key risk to the financial systems of countries where there are Islamic banks. Therefore, the CBN’s recent move is a welcome development. More Nigerian banks would be wise to have Islamic banking windows, but they must be mindful of some potential pitfalls. Customers might be sceptical about whether the bank is truly able to separate its Islamic banking arm from its interest-earning entities. There is also the possibility of regulatory arbitrage, where the bank potentially transfers risk between the two arms, depending on which is favourable. The CBN seems well-geared to handle such potential abuses.

#Nigerian central bank aims to grow Islamic banking sector with new regulations

The Nigerian central bank is setting up two new financial instruments to provide liquidity support for non-interest financial institutions. The new regulatory measures are designed for the proliferation of sukuk and takaful. Among the banks in Nigeria, only Sterling Bank, Stanbic IBTC and Jaiz Bank offer Islamic services. Jaiz, the only fully-fledged Islamic lender on the list, opened its doors in 2012. The Nigerian central bank stipulated several conditions for offering Islamic finance in October. Non-interest lenders must have a liquidity problem to be able to access a new discount window, which will offer it at zero interest, though lenders must post collateral.

ICD gets active in Africa to widen Islamic finance appeal

The Islamic Corporation for the Development of the Private Sector (ICD) is planning to increase its activities in Africa to widen the appeal of Islamic finance across the region. ICD chief executive Khaled Al-Aboodi said the ICD was helping develop Islamic finance channels, that is Islamic banks, investment and ijara companies, takaful and retakaful firms. Africa represents around 12% of the ICD’s cumulative investment approvals and this figure is expected to rise in coming years. Some of the projects will be led by Senegal-based Tamweel Africa, jointly owned by the ICD and Turkey’s Bank Asya. Tamweel already holds stakes in Islamic banks in Senegal, Niger, Guinea and Mauritania. Further Islamic banks will be established in Benin, Mali and Chad. In Tunisia, the ICD has teamed up with the newly created sovereign wealth fund, Caisse de Dépôts de Tunisie, to set up a $30 million (R315m) fund to support businesses. The ICD also hoped to improve access to sharia-compliant financing for small and medium-sized enterprises (SMEs) across Muslim countries, Al-Aboodi said.

#Nigeria to offer liquidity support to boost Islamic banking

Nigeria’s central bank is setting up two financial instruments to provide liquidity support to boost Islamic banking. The central bank has been working to set regulatory ground rules for sukuk and takaful to try to emulate the success of the industry in Malaysia. Islamic banking services are currently offered by the Islamic window of Sterling Bank, Stanbic IBTC and Jaiz Bank, but Nigeria wants to increase the sector. The country is gradually opening up to Islamic finance to bring non-interest banking to over 80 million Muslims. In October the regulator granted liquidity status at its discount window for banks' investment in Islamic bonds issued by national governments, and for banks’ liquidity ratios. Nigeria launched a 100 billion naira ($318 million) debut sovereign sukuk in the local market in June to help develop alternative funding sources.

Bridging the $300b #infrastructure #gap with Islamic finance

In #Nigeria about $300 billion (N108.75 trillion) is required to close the country's infrastructure gap. To close the gap, the Federal Government has turned to the Islamic Development Bank (IsDB). Some financial analysts are warning that this is capable of undermining the nation’s constitution and its secularity. While insisting on the need to defend Nigeria’s secularity, some of them pointed out that there are other viable options and numerous non-religious lending institutions Nigeria can turn to for help. For example, public affairs analyst, Barr Obiora Akabogu, said Nigeria could fall back on the Sovereign Wealth Fund (SWF) to raise cash. Nigeria’s pension fund, which stood at N6.02 trillion as at last November, is another viable option to build infrastructure. Others have recommended the Public-Private Partnership (PPP) model for designing, building, financing and operating new infrastructure.

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