Islamic finance in Africa

ICD is enabling enterprise, building prosperity and helping sustainable development

With its emphasis on transparency and fairness, Islamic finance has much to offer any economy, and Africa, with its bright economic prospects and relatively unbanked population, is a continent in which we at the ICD can do an enormous amount of good.

Our aim, and the aim of our parent organisation the Islamic Development Bank, is to encourage development through access to fair finance, making our mission entirely aligned with the UN’s Sustainable Development Goals (SDGs).

At the heart of the SDGs is a commitment to end poverty, protect the planet and ensure prosperity for all. The Islamic finance principles of financial stability, financial inclusion and shared prosperity are in perfect harmony with the SDGs of ensuring food security, healthy lives, gender equality, resilient infrastructure, shelter, as well as helping build peaceful and inclusive societies.

Our commitment to helping foster Islamic finance in Africa can only help further those SDGs across the continent. And, as Boston Consulting Group points out, Islamic finance is not just for Muslim countries, or Muslims. Like any fair and efficient financial system, it can empower any community.

We have operations in more than 20 African countries. We advise on sukuk issuances and help finance infrastructure projects. We are also a major investor in the banking sector, running Tamweel Africa, a consolidated Islamic banking group that operates across West Africa.

Tamweel’s role is to build modern, dynamic Sharia-compliant African banks that will contribute to the economic development of the countries in which they operate. The development of banking networks is playing a crucial part in the development of the African SME sector, an important economic driver and key contributor to sustainable GDP growth.

Despite their importance to economic output, market conditions and regulatory environments do not always support SMEs. Islamic finance can help fill this gap, with Sharia-compliant solutions complementing the debt-financing products that are becoming available to African SMEs.

Africa is full of potential. By 2040 it will be home to one fifth of the world’s young people with a larger labour force than China. It has more than half of the world’s uncultivated land and access to a huge amount of natural resources.

By helping to develop strong and dynamic banking networks offering fair, flexible and ethical financing solutions, we are playing an important role in the development of a continent that has so much to offer.