- Sub-Saharan Africa is the world’s largest untapped ‘Islamic economy’ market, finds new report
- Fast-growing Muslim population stimulating demand for halal and Sharia-compliant goods and services, from food and tourism to banking
- Sukuk used to finance public spending in five Sub-Saharan African countries
Africa is the world’s largest untapped ‘Islamic economy’ growth market, according to a new report by the Economist Intelligence Unit, commissioned by Dubai Chamber.
From Shariah-compliant banking to halal goods, the continent’s large and growing Muslim population is one growth driver. Sub-Saharan Africa’s Muslim population is forecast to grow from about 250 million in 2010 to nearly 670 million in 2050, according to projections by Pew Research Centre. This is driving demand for halal goods and services and Shariah-compliant banking, either through Islamic banks or ‘Islamic windows’ in mainstream banks.
The second driver is Africa’s financing needs as the continent grapples with its infrastructure deficit. Five Sub-Saharan African countries have issued Shariah-compliant bonds, or sukuk, with proceeds used to fund infrastructure spending.
Governments in 18 countries have passed Islamic-economy related laws, reforms, regulations or initiatives, the report finds. South Africa has advanced its Islamic finance system since 2011, as have Nigeria, Senegal and Kenya more recently. Countries in the exploratory reform phase include Uganda, Ethiopia and Zambia.
The report also identifies challenges facing regulatory reforms, such as the technical difficulties of implementing Shariah-compliant systems. Development agencies could offer capacity-building support.
Adam Green, the editor of the report, said: “Islamic economy refers to a wide range of commercial activities and geographies, spanning everything from sukuk to halal travel. As one of the two dominant religions in Africa, Islam plays an important role in shaping consumer preferences and behaviours. No economic outlook of Africa can be complete without understanding this segment.”
Read Mapping Africa’s Islamic economy here
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Notes to editors
About the report
Mapping Africa’s Islamic economy is a report by The Economist Intelligence Unit. The findings are based on desk research and interviews with experts from companies and institutions including Stanbic IBTC, EY, Sterling Bank, Qatar Financial Centre and the South African National Halaal Authority
About The Economist Intelligence Unit
The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.
