Africa

#Nigeria: Muslim Scholars Highlight Benefits of Islamic Financing to Economic Growth

Reputable Muslim scholars participated at Forum For Islamic Education & Welfare in Nigeria. The President of MUSWEN, Alhaji Sakariyau Babalola said the adoption of the Islamic financial system was growing in the country. Central Bank of Nigeria expert Dr. Bashir Umar said that Islamic finance was the way to finance infrastructure projects and had an integrated cooperative model which can eradicate poverty and enhance economic empowerment. He noted that financial inclusion was the key element to achieve inclusive development needed for sustainable growth in the country. Umar added that the presence of Islamic banking in the country has brought the unserved and undeserved members of the society into the formal financial sector.

Islamic finance is key to closing sub-Saharan infrastructure gap

The infrastructure gap is nowhere more pronounced than in sub-Saharan Africa. The Boston Consulting Group/Africa Finance Corporation report of May 2017 states that the sub-Saharan Africa infrastructure gap amounts to about $100bn in yearly infrastructure investment. Islamic finance is fundamentally aligned with economic and social development, poverty alleviation and advancement towards the UN sustainable development goals. The asset-based approach of Islamic finance is in line with traditional infrastructure-financing models that involve the procurement or construction of a tangible asset. In the past decade, Islamic finance has been growing steadily in sub-Saharan Africa. South Africa was the first African sovereign to issue sukuk, followed by Senegal, Ivory Coast, Togo and Nigeria. Most Islamic funding for infrastructure development is flowing through governmental channels. In sub-Saharan Africa large infrastructure investment is still mainly the preserve of the public sector and public-private partnerships are still in their infancy.

Africa: Will #Fintech Grow Financial Inclusion?

Financial technology investors are calling for policies that promote development to achieve the World Bank target of universal financial access by 2020. Financial experts who attended the Africa Payments Innovation Summit in Nairobi said digital disruption could increase the continent's banked population. The emergence of mobile money services over the past decade has contributed to financial inclusion in Africa. According to the mobile operators association GSMA, there were 277 million registered mobile money accounts in sub-Saharan Africa at the end of 2016. But despite the progress, at least 85% of transactions in the region are still in cash. There is a mistrust between banks and telcos about whose customer they are serving, who owns the infrastructure, and the loading of additional costs on transactions between the two. Central Bank of Kenya Governor Patrick Njoroge warned innovators against getting carried away by technology.

#Kenyan firm tapped to train Islamic Finance #professionals

The Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) has accredited Kenyan firm Aqeel Consulting to offer its professional development courses in Islamic finance. Aqeel Consulting's Managing Director Jaafar Abdulkadir said this partnership would develop a critical mass of professionals to support the growth of Islamic finance in the region. Aqeel will be conducting professional development courses on behalf of CIBAFI, which will be the certification body. The courses will be customised to suit the local scenario. Abdulkadir added that the collaboration with CIBAFI would reduce reliance on expertise from other countries. The professional development courses will meet global standards, but with local relevance.

Gulf African Bank bucks trend with two branches plan

Gulf African Bank is set to open two new branches in Hurlingham, Nairobi and Mtwapa in Mombasa this year. Although several local lenders have announced outlet closures in recent months, Gulf African Bank is optimistic and set to improve access to financial services. Other local banks announced a freeze on expansion in a bid to protect their bottom lines. There are three fully-fledged Islamic banks in the country: Gulf, First Community and Dubai Islamic Bank, with at least 11 conventional lenders with dedicated counters for such products.

Counting Milestones From N100bn #Sukuk Roads Investment Fund

In September 2017, the Federal Government of Nigeria raised N105bN to fund the construction of roads in the country. Soon after that, finance minister Mrs. Kemi Adeosun began the disbursement of the fund to commence work on the twenty five key economic roads in the six geo-political zones. The reconstruction of the outstanding sections of Benin to Ofusu to Ore to Ajebandele to Shagamu Expressway had been completed. At the other sites the construction work is on with massive presence of construction machineries and materials.

Court orders forensic #audit of Jaiz Bank statement

The Chief Judge of the Federal Capital Territory of Nigeria has ordered a forensic examination of a Jaiz Bank statement. The order was made sequel to an oral application made by Mr Sebastine T. Hon in a law suit filed against the bank and 11 others. Hon alleged that the statement of the bank was manipulated as the account did not reflect its true status. The judge ordered Jaiz Bank to make available the original or certified copy of the bank statements covering the amount available with the garnishees connecting Zamfara State Government.

Jaiz #Zakat foundation shares N5m among beneficiaries

A N5 million zakat fund was distributed by the Jaiz Zakat and Waqf Trust Foundation (JZWTF) last weekend in Lagos, Nigeria. The Chairman of the occasion, Professor Lai Olurode, described the zakat distribution by JZWTF as very important because it showcases the practicality of Islam. Olurode, who is also the Chairman of the University of Lagos Muslim Community, remarked that education was a very important key element in poverty eradication. The chairman requested that Jaiz management should recognise the University of Lagos Muslim Community as an institutional beneficiary of zakat fund. He said the community required a minimum of N2.5 million to maintain the mosque every month, excluding stationeries and salaries of workers among other needs.

Tapping the Islamic banking potential in Africa

Africa represents a huge untapped market for Islamic Banking. The demand for Sharia-compliant products in Africa has been growing for both Muslims and non-Muslims. Most countries such as Senegal, Uganda, Morocco, Kenya, Gambia and Nigeria have already reformed banking laws to allow the setting up of Islamic institutions. While there is a large demand for Islamic Banking, the availability of Islamic Wealth Management Products is still relatively small, leaving a large opportunity for UAE banks. At Noor Bank, for example, each international client is assigned a dedicated relationship manager and customer service officer. Going forward, the African market holds great potential for the UAE Banking sector. Latest forecasts indicate that Africa’s GDP will grow to 3.7% in 2018, according to the African Development Bank.

#Sukuk Issuance in Africa: A Prospect for Further Growth

The burden of financing Africa’s infrastructure projects is shifting away from banks towards the Sukuk market. To date, Africa has witnessed a growing share of sovereign Sukuk issuances. While states such as Sudan and Gambia have issued Sukuk in the past, it was in 2014 that Senegal debuted the region’s largest Sukuk issuance (USD 208 million). Soon South Africa and Cote d’Ivoire followed suit. In June 2016, Senegal launched its second Sukuk issuance, valued at USD 350 million. Togo issued its maiden Sukuk worth USD 277 million with a 10-year maturity and Cote d’Ivoire issued its second sovereign Sukuk valued at USD 263 million in August 2016. Several African countries are in the midst of preparing legislation to facilitate Sukuk issuances and facilitate Islamic finance in their respective financial market.

#Mali's debut sale of Islamic bonds to fund social housing

The government of Mali will complete its first sukuk sale using a lease-based structure linked to affordable housing projects. The West African nation aims to raise 150 billion CFA franc ($285 million) via a seven-year deal that carries a profit rate of 6.25%. The sukuk uses an ijara structure that is underpinned by social housing projects in N‘Tabacoro in the southwest of the country. The sale is being arranged by the Islamic Corporation for the Development of the Private Sector (ICD), which has advised the governments of Togo, Ivory Coast and Senegal on their own sovereign sukuk. The sukuk assets are managed by Taiba Titrisation, a Senegal-based subsidiary of the ICD.

Why Nigerians need to embrace #Takaful insurance

In this interview Momodou Musa Joof, CEO Jaiz Takaful Insurance, shares his experiences managing firms and enterprises offering Islamic insurance. Joof believes that Takaful establishment in Nigeria benefits the economy tremendously by creating employment, settling genuine claims and insuring insurable risks. When there is surplus or profit, Takaful insurance, especially Jaiz Takaful Insurance distributes it back to the participants who have not suffered losses. This way, it forms part of poverty alleviation and has nothing to do with Islamising Nigeria, as some people believe. Jaiz Takaful Insurance operates with two distinctive accounts: Participants’ Account and Management’s Account. 70% of contribution goes to the Participants’ Account while 30% goes to the Management’s Account. Takaful is expected to pay genuine claims faster since claims are paid from the Participants’ Account the surplus of which goes for distribution at the end of business year. Out of the amount which goes for distribution, a prescribed ratio is always paid to the needy (Zakat).

#Uganda to publish Islamic banking rules soon -central bank

The government of Uganda has approved regulations covering Islamic banking. Governor Emmanuel Tumusiime-Mutebile said that once the regulations are gazetted, the central bank would be open for applications from financial institutions to offer sharia-compliant products. Uganda joins several African countries that have sought to develop interest-free banking in recent years, including Nigeria, Morocco and Senegal. Despite small populations of Muslims, countries such as Uganda, Kenya and Ethiopia are also developing the sector to expand financial access and inclusion. In December, the central bank of Uganda became an associate member of the Islamic Financial Services Board (IFSB), one of the industry’s main standard-setting bodies.

Banks embrace Islamic banking amid rising competition

The Central Bank of Nigeria released its guidelines for the operations of Non-Interest Banks (NIBs) in 2011 and
issued its first license to Jaiz Bank. At the same time, two conventional banks, Stanbic IBTC and Sterling Bank, received license to operate Islamic windows. Jaiz Bank commenced operations and remained Nigeria’s only full-fledged non-interest bank. However, Sterling Bank CEO Yemi Adeola recently revealed his plans to seek a license for a stand-alone Non-Interest Bank (NIB). He said the decision was informed by the feasibility studies conducted by the lender, judging from the potential market and financial resources of customers expected to embrace NIB. The number of banks in the country offering non-interest banking products is set to increase. SunTrust Bank Nigeria (SBN) and the Islamic Corporation for Development (ICD) signed an agreement to establish a new non-interest banking window in Nigeria.

CIBAFI and The World Bank presenting study on "Corporate Governance Practices in Islamic banks 2017"

It is well established that good corporate governance strengthens institutions and financial sectors, and in so
doing contributes to building strong economies and economic growth.

Deficiencies in corporate governance were among the factors that contributed to the global financial crisis
(GFC) of 2007–08. As a result, global standard setters such as the Basel Committee on Banking Supervision
(BCBS) and the Organisation for Economic Co-operation and Development (OECD) have been updating and
strengthening their guidelines on good governance practices.

The Islamic Financial Services Board (IFSB), which sets standards for Islamic financial institutions, published its
Guiding Principles on Corporate Governance in 2006 as its standard IFSB-3. The Principles address, within the
context of corporate governance, the distinct features of Islamic banks, such as the different relationship that
they have with some of their stakeholders.

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Jaiz Bank is enjoying a fresh wave of confidence from investors

Amid a volatile environment, Jaiz Bank Nigeria is enjoying a rising wave of confidence among investors. Share price has been in an upward trajectory ever since the start of the year.

S&P sees uncertain outlook for global #Sukuk market in 2018 as #Nigeria relishes success in first attempt

The favourable outcome of Nigeria’s first Sukuk issuance suggests that it is as a veritable financing option for the country. However, global rating agency Standard & Poor’s says its outlook for the market remains uncertain in 2018. According to S&P analysts, total issuance will likely decline to $70 billion-$80 billion in 2018 from the over $97 billion recorded in 2017. The analysts noted three main reasons for their expectations including a likely tightening in global liquidity, mounting geopolitical risks and slow progress on the standardization of Islamic products. They expect that the cost of funding for issuers will rise and that liquidity from developed markets channeled to the sukuk market will reduce. A major concern is the slow pace of standardization of Islamic finance products.

#GAMBIA – MEDIA INVITATION – New agreement between The Gambia and The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (ISDB) Group

The CEO of The International Islamic Trade Finance Corporation (ITFC) will be on an official visit to The Gambia on 16th January 2018. A new agreement will be signed by Eng. Hani Salem Sonbol, CEO of ITFC and H.E. Hon. Mrs. Fatoumata Jallow-Tambajang, Vice President and Minister for Women’s Affairs. Since its inception in 2008, ITFC has approved a total of 30 financing operations for The Gambia for a total of US$437 million. Hani Salem Sonbol will be available for face to face interviews. Only registered journalists will have access to the signing ceremony.

#Sukuk: An alternative economic model in #Nigeria

The growth in Sukuk’s popularity can be traced back to the global financial crisis in 2008. Since then, several sovereign and sub-sovereign bonds were issued under Islamic principles. In Africa it is Kenya that has commited to positioning itself as a regional Islamic finance hub. Finance Minister Henry Rotich outlined the steps as part of the country’s 2017/2018 budget aiming to level the playing field between Islamic and interest-based transactions. The primary objective is to prepare the groundwork for a sovereign sukuk but also to attract corporate sukuk from the region. Nigeria’s seven-year N100bn Sukuk bond offers an avenue for a competitive alternative to the conventional banking system and a path towards sustainable economic recovery.

#Kano Gets First Islamic #Insurance Services

Islamic insurance services were formally launched yesterday in Kano, Nigeria. The launching ceremony of Jaiz Takaful Insurance was held at the premises of the palace of the Emir of Kano. The managing director of Jaiz Takaful Insurance, Mahmud Moussa Joof disclosed that the sector has currently recorded 25 to 35% global growth. He added that Takaful insurance was open to everybody as against contrary insinuations from certain quarters. At the ceremony, the Emir of Kano, Muhammad Sunusi II lamented over the faulty payment system by insurance service providers in Nigeria. The Emir urged operators of the Islamic Insurance business to be honest to Kano people, while urging Kano people to form cooperative groups to access the Islamic insurance services, affirming that, subscribing to insurance services is permissible in Islam.

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