Oct 13 Senegal is reviving plans to issue its
first Islamic bond through a 100 billion CFA franc ($200
million) sukuk programme that would be launched next year,
The Senegalese government would sell the sukuk in
cooperation with the Jeddah-based Islamic Corporation for the
Development of the Private Sector (ICD), an affiliate of the
Islamic Development Bank, the institutions said.
"This project is the beginning of an ambitious programme
which could lead to the financing of innovative infrastructure
and energy projects through sukuk issuances," a statement quoted
Economy and Finance Minister Amadou Ba as saying.
A sovereign sukuk from Senegal would be an important step in
developing Islamic finance in sub-Saharan Africa; so far, sukuk
issuance has been small. Gambia has been selling small amounts
of Islamic debt for years and Nigeria's Osun State last month
sold a local currency sukuk worth $62 million.
Governments in countries including South Africa, Kenya,
Nigeria and Senegal have been considering sukuk issues as a way
to attract cash-rich Islamic funds from the Gulf and southeast
Asia. Senegal has been studying the possibility of an issue
since at least 2011.
Khaled Al-Aboodi, chief executive of the ICD, said the
Senegalese sukuk would be the first of a series of regional
programmes that would be offered to West African states.
The ICD, which promotes the economic development of its 51
member countries by financing private sector projects, has also
been trying to expand the consumer base of Islamic finance in
Africa by helping to establish institutions in countries such as
Mali and Benin.
The Central Bank of West African States, which serves
countries in the region, has in principle accepted that the
Senegalese sukuk could be used in its repurchase operations,
Aboodi said. This could make it an attractive investment for
banks operating in the local money market.
Citigroup would help to arrange the Senegalese issue,
the statement said.
(Editing by Andrew Torchia)