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Amid a surge in sovereign debuts in the sukuk market last year, one region – perhaps unexpectedly – featured prominently: Africa.
First to the market was Senegal, the biggest economy in sub-Saharan Africa with a majority Muslim population after Sudan. Its CFAFr100 billion ($200 million) debut last June was Africa’s biggest-ever sovereign sukuk, attracting both local and international buyers. South Africa followed in September with a $500 million 5.75-year deal that was only the third-ever sukuk issued by a non-Muslim majority country, according to Standard Bank, one of the lead managers.
Those in the industry argue Africa’s new-found visibility as a market for Islamic finance is long overdue. Indeed, around a quarter of the world’s Muslims live in Africa – a population of almost 400 million. Moreover, as developed countries and more established emerging economies slow, this is a continent that is increasingly important to global growth, with sub-Saharan Africa set to continue to grow at around 5% in the coming three years, according to the World Bank.
Given that growth, South Africa’s relatively early entry as a non-Muslim issuer is perhaps not entirely inappropriate. South Africa’s official entry as the ‘s’ in the ‘Brics’ club of big emerging nations in 2010 was arguably always more symbolic of the rise of African economies rather than South Africa alone.
