While there have been quite a few local-currency issuances, there have only been two international ones in the last 10 years – a 5.75-year $500m sukuk from South Africa in 2014, and a three-year $150m sukuk from Africa Finance Corporation in 2017. According to Standard Chartered Bank, total African sukuk issuances between 2001 and 2021 amounted to $25.3bn, constituting just 1.55% of the global sukuk industry. Despite Nigeria’s rise, Sudan remains the dominant African player in sukuk issuances. Other countries that have issued sukuk bonds include Senegal, Gambia, Togo, Côte d’Ivoire, Morocco, and Mali. “Egypt, Morocco and Tunisia have also made the necessary regulatory and legal changes and are ready for issuances,” writes Ahsan Ali, managing director and head of Islamic origination at Standard Chartered Bank in Dubai. “Being Muslim-majority countries, and with closer proximity to the Middle East, that gives them a natural advantage to tap international sukuk investors.” But can a fledgling African sukuk market ride on the coattails of a burgeoning green bond market? According to Ali of Standard Chartered Bank, the main challenge would be the lack of a supportive legal and regulatory framework in many African countries.
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