How sukuk can solve Africa’s infra gap

Author: Lizzie Meager | Published: 16 May 2016

Sukuk can help solve Africa’s vast infrastructure needs, but more action from governments and innovation from corporates is needed

South Africa's government issued its first sukuk in 2014

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....