Tunisia to issue first Islamic bond
Tunisia's government plans to issue the country's first Islamic bond this year, Chief Executive of Al Baraka Banking Group Adnan Ahmed Yousif has explained.Tunisia's government plans to issue the country's first Islamic bond this year, Chief Executive of Al Baraka Banking Group Adnan Ahmed Yousif has explained.
"I believe Tunisia has the potential to become the Islamic finance hub for Africa. It's working towards having all the requirements needed for that," he told Reuters.
This bond could help Tunisia's recovery following the Arab Spring by gaining access to Islamic investment funds in the Arab Gulf
The Islamic finance sector is currently worth around $1,000 billion (€766,5 billion) and should reach $1,800 billion in 2016, according to figures from the African Development Bank (AfDB).
However, in North Africa, this type of finance remains underdeveloped, mainly because of low awareness from potential clients, the limited development of retail banking activities and the lack of support from the governments, according to a report from the AfDB published last December.
In Tunisia, the lack of a specific legal frame regarding Islamic banking law might have hampered the development of Islamic banking services, the Tunisia-Live news website stated, adding that Tunisia comes 23rd in world rankings of Sharia-compliant assets, with $800 million out of $36 billion globally.
Slaheddine Kanoun, Interim Administrator at the Islamic Bank Zitouna, told L'Economiste Maghrébin newspaper that "the enrichment and diversification of financing resources" is Islamic finance's main contribution to the economy.
The AfDB report shows there is room for Islamic banking services in North Africa and adds that it could contribute a more inclusive development model that favours an equal sharing of risks and benefits between project providers and resource users.