by Steven Langdon
In our recent book (Langdon/Ritter/Samy, African Economic Development, Routledge, 2018,) we discuss how various African countries have begun to diversify their international financial sources, using bond issues, for instance, so as not to depend as much on direct foreign investment.
Now further diversification is becoming evident in the form of sukuk bonds from Islamic sources. This is lending in which interest payments are not allowed, with agreed levels of profit sharing from project results. Over US$2.3 billion in such financing has taken place in Africa since 2014, with the Ivory Coast and South Africa as the largest recipients (and Muslim Asian and Gulf States countries as the main source of the funds.)
It is important for Africa to broaden it’s sources of capital for development, so this trend is a significant plus — as the World Bank and other international agencies have recognized. For more details, see the attached link.