Prime Cabinet Secretary Musalia Mudavadi has assured the Muslim community that the government will develop a fit-for-purpose regulatory framework to promote the sustainable growth of Shariah-compliant financial products.
Speaking during the listing of Linzi Sukuk Bond on the Unquoted Securities platform at the Nairobi Securities Exchange (NSE), Mudavadi said the move will help in diversifying the financial products the market offers.
“We assure our Muslim community in Kenya and the region that the government will develop a fit-for-purpose regulatory framework to promote a sustainable growth of Shariah-compliant financial products,” he said.
The Prime CS said the bond offers an opportunity for the Islamic community in Kenya to participate in the bond market, while also addressing the gap in inclusive finance and opening up of the capital market.
He went on to say that it will also position Kenya as a more active player in the global Islamic financial services industry whose estimated value is US$5 trillion and growing.
Mudavadi added that it is also a great opportunity to turn Nairobi into a vibrant Islamic finance hub, cementing its position as the financial capital of Eastern and Central Africa.
“Deepening access of our Muslim brothers and sisters to the capital and financial markets will underline Kenya’s leadership in developing Africa’s Islamic finance industry, which remains small and underdeveloped,” he said.
“It is disheartening to note that Africa’s share of the global Islamic finance industry is a mere one per cent, even though Africa is home to 27 per cent of the world’s Muslim population.”
He termed the listing of the first Shariah-compliant product a significant milestone and a turning point in the development of capital markets in Kenya.
President William Ruto on his part directed the financial regulators to work with the Treasury and Islamic finance stakeholders to develop a regulatory framework that can support the growth of Islamic finance in the country.
Islamic finance, Ruto said, has the potential to unlock investment resources and boost economic growth.
“As we look forward to further integrating public agencies into the securities market through privatisation...we remain dedicated to our goals of job creation and economic development, crucial for realising the Sustainable Development Goals and improving the overall quality of life,” he said.
Present at the event were National Treasury and Economic Planning PS Chris Kiptoo, Senior National Treasury and Planning officials, Capital Markets Authority Board chair Ugas Mohamed, and the CMA Board Members.
“Market sentiments have improved, attracting portfolio flows to both bond and equity markets. Responding to such flows, the Kenya currency has appreciated markedly against the U.S. dollar since mid-February after having recorded a significant depreciation in 2023,” Kiptoo said.
Nairobi Securities Exchange Board chairman Kiprono Kittony, NSE Board Members, and Capital Market Industry Players, among other guests, were also present.