Kenya has caught the eye of rich Middle East investors seeking to tap into tap into the country’s service industry to diversify their oil wealth.
This week, the country will host an Islamic Finance Expo organised by Hogan Lovells, a multi-national law firm co-headquartered in London.
“Financial institutions face the challenge of developing innovative products whilst tackling new regulation and adhering to guiding Sharia principles. Kenya has great potential to become the region’s leader in Islamic finance,” said Global Head of Islamic Finance at Hogan Lovells Rahail Ali.
Last week, the Nairobi Securities Exchange signed a deal with Nasdaq Dubai to facilitate the creation of a Sukuk sector in Kenya, which will tap into arranging and listing Government bonds as well as other Government-related entities and private businesses. Earlier this year, Kenya offered Islamic financiers an exemption from paying stamp duty in an effort to raise alternative funds for long-term projects.
In a bid to unlock the Sukuk (Islamic) bonds, the President Uhuru Kenyatta signed the Finance Bill, which paved the way for the bond, with sections exempting investors from payment of the four per cent stamp duty on transfer of title relating to Sukuk. It also set the stage for an amendment to the Public Finance Management Act to allow the Government to invest in the Islamic bond.