EDITORIAL

Islamic finance is gaining momentum in Africa!

Dr Umar Oseni, IILM Corporation (Malaysia), asserts that "Africa stands to benefit from our drive to penetrate new markets for diversification benefits and scalability, which Africa is on our top priority list. '' He is not the only one nurturing this ambition; Africa is of interest to several other financial institutions and industry players. Africa is on the move! It is moving and growing, and so is Islamic finance. Indeed, the Islamic finance industry in Africa is not yet as developed as in other parts of the world (Europe and Asia). Nonetheless, this should not overshadow the growing momentum that we have seen through numerous activities across the continent. Islamic finance is positioning itself as a viable and increasingly sought-after leverage to boost Africa's development. Staying true to our vision of Connect. Learn. Impact, we bring you timely coverages on several sectors of Islamic finance in this second quarterly of IFC MAGAZINE.

In this vein, in an exclusive interview, Dr Umar Oseni, head of an international liquidity management organisation for Islamic financial institutions, talks about his experience and ambition with prospects for Africa. Mr Boubkeur Ajdir's article on the Islamic capital market addresses some of the structural regulatory issues facing Islamic finance.

To proceed, we are led into an eye-opening discussion on innovation and Fintech with their tremendous potential for Africa by Mr Mohammed Kateeb, President, Middle East and Africa, and Managing Director of Islamic Finance at Azentio Software, the first fully Islamic core banking provider (already present in Africa).

Dr Adama Dieye shares his expert view on the thorny issue of the rate of return on investments in the Islamic economy and the alternative to LIBOR, which has been used as a benchmark in many Islamic financial institutions. Consequently, the Governor of the Central Bank of Bahrain, Mr Rasheed Mohamed Al Maraj, said on this matter at the 20th annual conference of the Shari'ah Board of AAOIFI (The Accounting and Auditing Organisation for Islamic Financial Institutions): "I believe it is time for the industry to try to address one of the strongest and most common criticisms from the public about the use of traditional benchmark rates for Islamic transaction pricing. It is admittedly more complex and subtle than just using a money market reference price, but it is the right thing to do. "

A focus on Islamic insurance will enable readers to understand this new industry that is evolving with a more inclusive value proposition that resonates with African cultures. As such, Maguette Sacko sees Islamic insurance or Takaful as a vehicle for financial inclusion, which will de facto help improve the overall relatively low penetration rate of insurance. Also included are the highlights of the Abidjan Takaful Conference 2022 forum entitled: Harnessing the Potential of Takaful for Economic Inclusion and Sustainable Development in Africa.

The spotlight on South Africa comes from Dr Ziyaad Mahomed, who takes us down the history lane of the industry's development.

Finally, this issue is packed with other articles and columns that we hope will benefit many. Given this general enthusiasm on the part of Islamic finance organisations and players, is there not a need for further actions and initiatives by all stakeholders to enhance synergy for the sustainable development of the industry?

Happy reading!

Editor-in-Chief

There is no doubt that Islamic social finance has the potential to achieve human development through financial inclusion and shared prosperity. In order to unlock the full potential of it, there is need to understand the challenges we face in the world in the implementation of it.

In Islamic banking, there is no black box that needs a genius to unwind it. Many of these conventional products that have been under stress lately are very complex and need special risk management tools. In Islamic banking, you will not have this kind of thing. Some of these products would not be sharia accepted.

Islamic finance can, in principle, become a factor of financial stability because risk-sharing reduces the debt ratio, and the exchanges are backed by tangible assets and therefore fully guaranteed.

All that we had borrowed up to 1985 or 1986 was around $5 billion and we have paid about $16 billion yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors’ interest rates. If you ask me what is the worst thing in the world, I will say it is compound interest.