Sukuk can help solve Africa’s vast infrastructure needs, but more action from governments and innovation from corporates is needed
The cost of addressing the continent's infrastructure deficit is approximately $90 billion a year and will be for the next decade, according to EY. There’s also a large Muslim population, projected to grow in the future, and in 2014 66% of all sub-Saharan Africans didn’t have a bank account.
Meanwhile Islamic finance requires a clear link with real economic activity and for transactions to be backed by tangible assets – making it a perfect fit for infrastructure projects.
Last month the World Bank’s lead financial sector specialist Zamir Iqbal urged market participants in the Mena [Middle East and North Africa] region to make use of Islamic bonds to fund their projects, which suffer a huge funding shortfall....