Islamic Fund Management
140
4.5
South Africa
Africa has untapped potential in Islamic finance, ranging from Islamic banking,
takaful
, sukuk
for infrastructure development and Shariah funds. Home to more than 250 million Muslims
and with the presence of Islamic finance in more than 21 African countries, the African
continent is well poised to become a strong contender in the development of Islamic finance.
The region’s positive trends that include a rapidly expanding population, rising consumer
spending, economic needs and a modest rebound in GDP growth support this ambition.
South Africa had been the first Sub-Saharan African country to establish itself as a potential
hub for Islamic finance. Despite its relatively small Muslim population (1.5% of total
population), South Africa is ranked among the top 10 countries in terms of contribution to the
global Islamic fund management industry.
This case study on South Africa aims to examine the present environment and development of
its Islamic finance industry, with a specific focus on the Islamic fund management segment.
The issues and challenges faced by the country will be analysed and recommendations
proposed. South Africa has been chosen as a case study for the following reasons:
Its unique value proposition is envisaged to encourage other non-Muslim countries to
consider the benefits of encouraging the development of their own Islamic finance
markets.
Given the level of development of its conventional financial system, South Africa has a
competitive edge over most African countries in actively capturing and promoting the
Islamic finance industry.
4.5.1
Overview of South Africa’s Islamic Finance and Islamic Fund Management
Industries
A Snapshot of South Africa’s Islamic Financial Market Landscape
South Africa has one full-fledged Islamic bank, four Islamic banking windows offered by
conventional banks, one
takaful
company and seven Islamic AMCs.
Table 4.20 compares the
Islamic finance products offered by Sub-Saharan African countries:
Table 4.20: Islamic Finance Activity in Sub-Saharan Africa
Country
Issued
sukuk
Planning
sukuk
Islamic
banks
Islamic
windows
Foreign
Islamic
banks
Islamic
micro-
finance
Other
Islamic
products
Islamic
funds
Islamic
regulation
Nigeria
√
√
√
√
√
√
√
South Africa
√
√
√
√
√
√
Sudan
√
√
√
√
√
√
Senegal
√
√
√
Gambia
√
√
√
√
Kenya
√
√
√
√
√
√
Tanzania
√
√
Mauritius
√
√
√
Zambia
√
√
√
Uganda
√
√
Niger
√
√
Ethiopia
√
√