{"id":573765,"date":"2026-08-19T12:46:08","date_gmt":"2026-08-19T12:46:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/573765\/"},"modified":"2026-08-19T12:46:08","modified_gmt":"2026-08-19T12:46:08","slug":"egypt-holds-nearly-half-of-africas-7bn-sukuk-market-fitch-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/573765\/","title":{"rendered":"Egypt holds nearly half of Africa\u2019s $7bn sukuk market, Fitch says"},"content":{"rendered":"

\n\tRIYADH:\u00a0Egypt accounts for 48 percent of Africa\u2019s outstanding sukuk, making it the continent\u2019s largest market, as regulatory reforms and closer economic ties with the Gulf Cooperation Council support growth, according to Fitch Ratings.<\/p>\n

\n\tIn its latest report,<\/a> the credit rating agency said African sukuk crossed $7 billion outstanding in August, up 16 percent year on year.<\/p>\n

\n\tFitch said sukuk<\/a> is emerging as an alternative source of funding for some sovereigns on the continent, allowing them to diversify their funding sources and attract demand from GCC and African Islamic banks, Shariah-compliant investment funds and multilateral institutions.<\/p>\n

\n\tThe market remains underdeveloped, however, with enabling regulation lacking in most African countries and domestic Islamic financial institutions small or absent in many markets.<\/p>\n

\n\t\u201cEgypt issued its debut US dollar sovereign sukuk in 2023, and is subsequently emerging as a regular and substantial issuer of US dollar sukuk following regulatory reforms and deepening ties with the GCC. It also issued its first local-currency sukuk in 2025, and continued issuance into the first half of 2026,\u201d said Fitch.<\/p>\n

\n\tIt added: \u201cThis helped attract demand from Egyptian Islamic banks, which hold about a 5 percent share of banking system assets and had faced a lack of Shariah-compliant investment options.\u201d<\/p>\n

\n\tThe report\u00a0added that Egypt\u2019s general government debt will fall to 77 percent of GDP by financial year 2027, which could affect sukuk supply.<\/p>\n

\n\tSukuk concentration<\/p>\n

\n\tEgypt is followed by Nigeria at 26 percent, South Africa at 15 percent and Benin at 7 percent, the credit rating agency said.<\/p>\n

\n\tThe concentration highlights the uneven development of Islamic capital markets across Africa and Egypt\u2019s position as the continent\u2019s dominant sukuk issuer.<\/p>\n

\n\tEarlier this month, two government officials who spoke to Asharq Bloomberg revealed that Egypt is planning to issue the first tax sukuk in its history <\/a>during the current fiscal year, offering returns that are fully exempt from taxes.<\/p>\n

\n\tThe value of the sukuk and the return due on it will later be used to settle taxes owed by the taxpayer.<\/p>\n

\n\tGrowth continues, but issuance stays sporadic<\/p>\n

\n\tAround $1 billion of African sukuk has been issued so far in 2026, mainly by Benin and Egypt, compared with $3.3 billion in the full year 2025. The decline in new issuance this year underlines how dependent the market remains on a limited group of sovereigns able and willing to access the instrument.<\/p>\n

\n\tEnabling regulation for sukuk is absent in most African countries.<\/p>\n

\n\tDomestic Islamic financial institutions, which typically serve as both key investors and potential issuers, are either small or non-existent in many markets. Debt capital markets across the continent also remain underdeveloped.<\/p>\n

\n\tThe broader African debt capital market reached $1.6 trillion outstanding as of August. South Africa accounts for 39 percent of that total, Egypt 18 percent and Nigeria 9 percent.<\/p>\n

\n\tConventional bonds make up the overwhelming majority, while the sukuk share remains below 1 percent.<\/p>\n

\n\tFitch rates about $3.7 billion of African sukuk outstanding as of the end of the first half of 2026, of which all are speculative grade.<\/p>\n

\n\tRoughly 67 percent carries a \u201cB\u201d rating and is located in Egypt; the remaining 33 percent is rated \u201cBB\u201d and is located in South Africa. All rated issuers hold a stable outlook.<\/p>\n","protected":false},"excerpt":{"rendered":"RIYADH:\u00a0Egypt accounts for 48 percent of Africa\u2019s outstanding sukuk, making it the continent\u2019s largest market, as regulatory reforms…\n","protected":false},"author":2,"featured_media":573766,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-573765","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/573765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=573765"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/573765\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/573766"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=573765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=573765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=573765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}