Islamic Finance Vital To Boost Africa Growth

Over the last decade, trade between African countries and the rest of the world has grown significantly and, in particular, charting a 170 percent increase in trade with the GCC.

The ongoing shift by African countries from being aid-dependent to increasing trade and investment ties with the Middle East has positioned Islamic finance to play a key role in facilitating further increases in trade and investment flows between Africa and the Middle East. This is even more significant given the inherently strong linkages between Islamic finance and real economic activity and the potential to provide funding for key areas such as SMEs and project finance.

Increased interest from Gulf investors in terms of agricultural land acquisitions combined with a growing Asian investor base, particularly in manufacturing, is expected to provide further impetus to the growth of the continent’s economies.

Speaking ahead of Islamic Banking Summit: Africa (IBSA 2012) conference to be held on Nov. 6-7, 2012 at the Djibouti Palace Kempinski, Djibouti, David McLean, Chief Executive of IBSA 2012, noted that “as a result of the recent policy revisions, regulatory changes and economic reforms in key markets on the continent, Africa has now been re-positioned as the third fastest growing region in the world, after the Middle East and Asia. The resurrection of Africa’s trade ties with the rest of the world has resulted in an increased international investor interest in the region. The rapid expansion of the major economies in the region has also resulted in the need to invest heavily in developing vital infrastructure. These factors highlight the tremendous opportunity that Africa presents.”

The Saudi Gazette