The Business Forum in conjunction with the 11th IFSB Summit took place on 20th May 2014 in Mauritius.

Themed "Islamic Finance and African Infrastructure Development", the business forum brought together panelists from various region and business sector to discuss on the opportunities and challenges of the African infrastructure development, and provide valuable insights on how Islamic finance as an alternative financing can support the funding gaps in the region.
Select a speaker to see interview:
Mr. Daud Vicary Abdullah
President & CEO, INCEIF
As a moderator for the Business Forum, Mr. Daud Vicary Abdullah, President & CEO of INCEIF, the Global University of Islamic Finance shares insights into how Islamic finance can unlock the opportunities for growth of the African infrastructure development.
There are many opportunities and challenges for African infrastructure development. According to the Africa Competitiveness Report 2013 by the World Bank, the estimated financing requirement to close Africa's infrastructure deficit amounts to USD93 billion annually until 2020 (AfDB, 2010). Hence, there is huge potential to use both sovereign and corporate sukuk to raise funding for important areas such as highways and telecommunications networks to support the African infrastructure development. In addition, the key area of energy, and most importantly sustainable energy were largely under-served by Islamic Capital Market instruments.

While the current pan-African landscape looks promising for the growth and development of Islamic finance, the current cry is for much needed education in Islamic finance. In particular, the need for business decision makers to better understand the role that Islamic finance can play in capital-raising.

A further barrier to growth of Islamic finance is the absence of credit rating enhancement for African entities and the perceived low awareness of Islamic finance, coupled with a lack of understanding of the necessary regulatory, legal and standards environments that are required to foster the growth of Islamic finance in the region. The extra work required to alter perceptions in these areas is seen to increase costs and therefore acts as a deterrent to growth.

Based on Malaysia's experience, sukuk can be a viable tool for fund raising for key infrastructure projects in the key areas of power, highways and telecommunications for the African infrastructure development. One of the key areas that need to be looked into is how African corporations can be incentivised to raise sukuk and facilitate greater cross-border deal flows, when currently they are exposed to higher costs and currency exchange risk. Answers, from practical experience in Malaysia, indicated that political will was a key differentiator in gaining the necessary momentum.

In conclusion, the exchange of information and discussion among the international business community is absolutely vital to the growth of the industry. In Islamic finance, experience matters and that experience must be made readily available.

"Education is the most powerful weapon that we have at our disposal." — Nelson Mandela