Finance is a dynamic device in modern economies and an important catalyst and driver of economic growth and development in both developed and developing countries. Islamic nance has considerable potential to become an important catalyst in Africa’s economic growth and development. It also has the potential to facilitate innovation and competition in the wholesale and retail banking sectors and to support the commitment of the various African Governments’ towards credit market diversi cation. Africa has benefited from a decade of solid economic expansion – since 2005, GDP growth rates have averaged around 5% – which has led to increasing urbanisation and more foreign investment. The strong economic growth of Africa is supported by Africa’s increasing ties to the global economy, through both trade and financial channels. Africa is an important producer of many commodities such as oil, copper, coal, aluminium, timber and cocoa, and these have remained its important sources of economic activity and foreign investment. In 2013, total foreign capital flows into Africa amounted to USD56.6bln, up from USD51.7bln in 2012. Another key driving force for the African economy is the rise of the urban African consumer. Today, more than 40% of the African population live in urban areas, and this figure is set to increase to 54% by 2050. In the near future, a large consumer base is expected to attract more sustainable sources of investment, in addition to commodities-based investments.

This continued growth in major African economies will result in a need to develop resources-related services and infrastructure, which are ideal assets for some forms of Islamic nancing, such as Sukuk, Mudaraba, Murabaha and Ijarah. Africa is well positioned to structure and offer such instruments as part of nancing packages for resources-related development. Furthermore, the ethics embedded within Islamic finance fit well with a world looking for more consumer protection. With an active Muslim population representing about 53.04 per cent of Africa’s total population of 1billion, Islamic finance has huge growth potential in Africa, and it presents an important base to service this fast growing sector in the global nancial services market.

Recognising the growing significance of Islamic finance in Africa and as strong proponents of its overarching benefits the Africa Islamic Economic Foundation has launched a Initiative , Africa Islamic Financial Sector Development Initiative , to support the growth and development of Africa’s Islamic finance market. In order to meet the challenges and respond to opportunities in the industry, AFRIEF has built up a global network of experts, entrepreneurs and investors to ensure that we meet the increasingly sophisticated and needs of clients operating in the industry in the Continent.

The Initiative has three Components: