Kenya is one of the countries identified as prime markets for Islamic finance due to the structure of its financial market which is one of the best in Africa. The country’s Islamic Finance industry is young but showing great potential which the government is ready to leverage on to raise capital. It will, therefore, review all laws governing the industry ahead of a planned issuance of Islamic bond (Sukuk) for the first time.
“We want to be able to facilitate the issuance of the bond,” Githu Muigai Kenya’s attorney general told Reuters on Wednesday. According to him, the review of laws and regulations guiding Islamic Finance in the country will be completed in nine months.
The global market for Sukuk has expanded rapidly in response to increasing demand from governments, organisations and individual investors for Shariah compliant equity. Senegal, Sudan, South Africa and Gambia have all sold Sukuk. The two sovereign Sukuk issuances in Africa (Senegal and South Africa) have been oversubscribed. This sector has continued to grow and attract global investors due to increased international issuance. Africa received at least $14 billion in Islamic project finance and $1.6 billion from Sukuk issuances on international markets over the period 2005–2012.