Ruto backs Islamic finance as Sh3b Shariah bond listed at NSE

Stock market display at the NSE. [File, Standard]

President William Ruto has thrown his weight behind the development of Islamic finance in the country, following the listing of the Liaison Group’s Linzi Sukuk on the Nairobi Securities Exchange (NSE).

Speaking at the Nairobi bourse, Ruto hailed the 15-year, Sh3 billion Shariah-compliant bond as a “pioneering public-private partnership (PPP)” that taps into locally sourced funds.

“The structure of the Linzi Sukuk, aimed at providing housing at an average cost of Sh1.4 million - significantly less than the current average - enables Kenyans to own homes by paying as little as Sh7,700 monthly over 15 years,” Ruto said.

The president noted that the high demand for Islamic financial products, both domestically and internationally, presents an opportunity to diversify Kenya’s financing sources beyond traditional bonds and loans, enhancing the country’s financial resilience.

Ruto directed financial regulators to collaborate with the National Treasury and Islamic finance stakeholders to develop a robust regulatory framework that will support the growth of the industry, which he said has “tremendous potential to unlock investment resources and boost economic growth.”

The introduction of the Linzi Sukuk comes amid the government’s broader efforts to reform the capital markets and mobilise long-term financing for its Bottom-Up Economic Transformation Agenda.

Ruto maintained his administration’s plans to privatise state-owned enterprises and enhance the governance of public agencies, with the aim of boosting investor confidence and enabling these entities to access private capital more effectively.

“A robust, efficient, and transparent capital market is vital for providing liquidity and raising capital, which in turn supports our overall economic framework,” Ruto said without divulging additional details on the timelines to list key government agencies.

Kenya has ambitions to position its securities market as a regional hub for Islamic finance, as it seeks to unlock the estimated $5 trillion in global Islamic financial assets.

The president at the same time assured investors of a conducive business environment, saying the country’s investment legal framework provides adequate investor protection.

“I want to assure investors that I will go out of my way to make sure that Kenya is stable and safe for investors to unlock their potential in a peaceful environment,” he said.

Ruto noted that the government is pursuing ambitious reforms that will turn Kenya into a regional business hub, saying no one will be allowed to impede the progress of the country. He said investor confidence has been sustained by resilient financial markets and stable macro-economic indicators.

“To maintain this trend, the government is committed to entrenching a predictable business and economic environment through appropriate policy measures,” he said.

[Additional reporting by agencies]