A finance from Mecca

China, which is referred to as the financial power house with its hungry eye to re-colonize Africa’s growing economies and its natural resources is not the only region searching for opportunities in the continents. But the Gulf States, which include millions of Muslims who do business across the red sea, are also spying for profitable opportunities in growing African economies. Although many people on the continents has no bank accounts but major countries like Nigeria, Ghana, Kenya, South Africa, Sudan, and Morocco with a strong banking systems are growing sophisticatedly.

There are hope by banks from Gulf that the middle class, particularly among the Muslim north will turn to Islamic Finance and that the firms will raise its fund through Islamic bonds such as Sukuk.According to Moody’s a credit-rating agency, Islamic finance worth a puny $18 billion at the end of last year and that its potentially close to $235 billion-about what its estimates as the GDP of Africa’s Muslim population.

Finance from Gulf into Africa has been limited to few countries, such as Sudan, where only sharia-compliant finance is allowed in the north and which dominates holdings over half of Africa’s Islamic-banking assets. Gulf banks that are familiar with the country’s language and oil resources have partnered with Sudan’s investors to open Islamic banks.
Even the government of Sudan tapped from the sukuk from Africa issued by Sudanese cement firm to selling bonds to gulf investors to sidestep American economic sanctions over the massacres in Darfur.

African countries with major populations are Muslims combine the strong desire to promote Islamic banking by demanding heavily from Muslim customers.
“Islamic banking is a luxury product,” which have a propensity to do better in countries with established banking systems.

Albaraka, which is South Africa’s only Islamic banks, was set-up in 1989, and ABSA which is a South Africa biggest bank opened its Islamic banking division last two years, which offers phone, internet and branch banking across South Africa and its head, Ahmed Moola, said that the division made a lot of profits in the last two years of operation. while Kenyan‘s authorities licensed two Islamic banks, Gulf African Bank and First Community bank, which are both supported by Gulf Investment.
With a strong interest from the western banks, Kenya Barclays was the first to offer an Islamic Bank account named La Riba, meaning “no interest”.

With Nigeria with almost 70m Muslim population and a booming banking sector, has major brand of Islamic banks and financial investment which are Platinum-habib Bank (PHB), Lotus Capital’s Halal fund, IBTC Ethical Fund and Jaiz Bank international Plc (JBI) which is going to commence operations later this year, and a plan by the Securities and Exchange Commission (SEC) to put Islamic banking capital market instrument that are sharia compliant which will serve as an alternatives to traditional debt markets.

Another major effort to boost and encourage Islamic finance is the setting up of a centre of information and research in Islamic economics, banking and finance (CIRIEF) has been established in the northern city of Kano.

A major promising area of growth maybe in projects finance and bonds and the continents large need for infrastructure is always compared by the shortage of investment funds and which Gulf investors have always promised to bridge the gap. Project finance which is well suited for Islamic financial instrument is needed to back up physical assets. Gulf finance house,
An Islamic investment bank that operates in Bahrain, recently signed a $1.4 billion deal in Morocco to fund two tourism projects in 2006.While Senegal is contemplating to issue a sovereign Sukuk, which could be a 21st- century version of “the scramble for Africa”. But Gulf is night mare for the Chinese invaders