After years of struggling to launch, Egypt’s Sukuk market has finally taken off with the issuance of the country’s first corporate Sukuk in 2020. The Egyptian House of Representatives has also given its final approval for the draft Sovereign Sukuk Law, which outlines the terms for issuing sovereign Sukuk.
Under the new law, sovereign Sukuk will be issued to finance investment, economic and development projects within the state’s general budget. There are three fully-fledged Islamic banks in Egypt and 14 others offering Shariah compliant products on a window basis, including Ahli United Bank which has been said to have plans to become a fully-fledged Islamic bank.
As at the end of September 2020, Islamic banking assets in Egypt stood at EGP355 billion (US$22.63 billion) or 5.5% of the total banking sector, representing a growth rate of 13.6% compared with the same period in 2019. Islamic deposits also grew 10%, accounting for 7.5% of the total market.
Brave New World: Islamic Banking, Finance and Investment in Egypt
What does the Egyptian Islamic finance landscape look like in 2021 and what does the domestic Islamic finance ecosystem still require from regulators and market participants for it to flourish across multiple product areas and asset classes?
What role is Islamic finance set to play in the recovery of the local economy, the funding of the SME sector and the development and stimulation of continental and regional trade? What does the recent Sovereign Sukuk Law, as well as the recent first corporate Sukuk, mean for Islamic capital markets in Egypt, and how can Sukuk be effectively deployed to finance the corporate, financial institution and government-linked sectors?
What roles will public-private partnerships play in vital infrastructure development and what do Islamic finance structures offer? Are the salient features and benefits of Islamic finance being effectively deployed to promote financial inclusion and social impact in Egypt, and if not, what more can be done to promote this interaction? We ask a respected panel for their views.