Diversification of Islamic Financial Insturments
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The above table illustrates a comparison between the issuance of Government Musharakah
Certificate (SHEHAMA) and Government Investment Certificate (SARH) which shows the
dominance of SHEHAMA significantly.
3.4.4.3 Incentives of Sudanese Governmental Sukuk: (SFS 2017)
 The higher Shariah Supervisory Board for the banking system and financial
institutions in Sudan gave a fatwa underlining the legality of these certificates.
 Low investment risks.
 Higher profitability compared with other investment opportunities.
 Can be presented as first class collateral for banking finance.
 Can be feasibly liquidated and traded at any time easily in Khartoum Stock Exchange.
According to Sudan Islamic Finance Report 2016 (IRTI & CIBAFI), the Sudanese government,
through the Khartoum Stock Exchange (KSE) and CBoS, is quite active in the capital markets
with yearly Sukuk issuance since 1998. The majority of investors are local, however, and there
is a clear lack of a foreign investor base.
There are three types of certificates that are regularly being issued by the government to inject
liquidity into the market. The most active type is the government Musharakah certificates
(GMCs), also known as Shahama, which is issued every three months and structured as
Musharakah. The GMCs are issued for the purpose of government lending to cover the budget
deficit as well as for liquidity management. The two other types of certificates are Government
Investment Certificates (GICs) which base on Mudarabah and Ijrarah, and Central Bank Ijarah
Certificates (CICs).
In 2014, 29% of the country’s budget deficit was financed through GMC and GIC issuances, and
another 4% was financed by CIC issuances. There is a significant concentration of banks
investing in the sukuk issued by the government. By 2014 also, almost half of the investors in
GIC were commercial banks, with the Central Bank making up 22.3% of the investor base.
Although both GMC and GIC are issued every three months, there is a clear lack of retail
activity in the GIC market, as opposed to the GMC market where retail engagement stood at
13.3% in 2014. Retail Sukuk investors have a few key merits, mainly 1) tapping into a new
investor base which is usually overlooked, 2) creating a new investment opportunity for the
people, and 3) utilizing people’s money to more effectively develop the country instead of
placing their funds in fixed deposit accounts.
The Sudanese Sukuk market remains significantly untapped on the corporate side. As of the
end of 2015, there has only been one corporate Sukuk issuance in Sudan despite regular
issuances by the government. The assortment of Sukuk structures can play a key role in
developing the Sukuk corporate market. As per available data in Zawya, the only corporate
Sukuk issuer was Berber Cement Co. who made an issuance in 2007 before the separation
from South Sudan. The company raised US$ 130 million using a Musharakah structure with a
tenor of seven years. The Sukuk was fully subscribed by regional banks mainly from the GCC
indicating strong investor appetite to invest in Sudan corporate issuances.