Kenya reviews Islamic finance laws ahead of debut sukuk
Kenya is reviewing all laws and regulations governing its nascent Islamic finance industry to aid the issuance of a debut Islamic law-compliant bond known as a sukuk, its attorney general said on Wednesday.
The East African nation, which issued its first Eurobond in 2014, wants to expand the range of financing available for infrastructure projects like roads and power plants.
The Treasury has said it is looking at the possibility of issuing the sukuk in the 2016/17 fiscal year, starting in July, but it has not offered details.
“We want to be able to facilitate the issuance of the bond,” Githu Muigai told Reuters, adding the process will be completed in a maximum of nine months.
“We are in full flight with the review of that entire regulatory framework,” he said on the sidelines of a conference on Islamic Finance in Nairobi.
Islamic finance caters for investors who want to follow Islamic rules on avoiding direct payment or earning of interest, which are viewed as usury under Islamic law.
African countries have been changing their laws to accommodate Islamic finance in order to benefit from increased investment and trade flows from the Middle East.
“We realize the significance of this market and that is why we need to tap it and tap it fast,” Muigai said, adding Kenya was vying to be the hub for Islamic finance in East Africa.
Kenya’s central bank licensed two shariah-compliant banks in 2007. At least one firm has since started to offer Shariah-compliant insurance products.
Government officials want to turn Nairobi into an international financial centre and they have already signed a deal with Qatar to help them model the plan on Doha. (Editing by Toby Chopra)
By Duncan Miriri – Copyright reserved to Reuters 2016