Africa-Press. A report by the French newspaper Le Monde highlights a growing shift among several African countries toward Islamic finance and Gulf investments, after decades of reliance on Western funding and, more recently, Chinese financing. The move aims to tap into the substantial liquidity of Gulf states and diversify borrowing instruments.
In this context, Benin issued $500 million in seven-year Islamic sukuk in January, backed by specific assets that allow investors to earn returns through lease payments or profit-sharing rather than conventional interest.
According to the report, investor demand exceeded seven times the targeted amount, signaling rising interest in Islamic finance across the continent.
Ghislain Houngan, adviser to Benin’s minister of economy for international financing, said the objective is to “increase our room for maneuver by diversifying our financial instruments and turning to investors outside Europe and the United States.”
He added that Gulf investors seek long-term capital growth rather than short-term speculation, noting that the sukuk market is “less volatile” than traditional debt instruments.
This shift comes as Africa’s public debt reached about 62% of GDP in 2025, up from 37% in 2012. Other countries are following suit: Nigeria has issued local-currency sukuk and is preparing a new dollar-denominated issuance, Algeria has established a legal framework for such instruments, and Senegal is moving in the same direction.
In 2025, Africa issued about $3 billion in sukuk, including $2.8 billion in Egypt, compared with roughly $13 billion in conventional bonds. The total African sukuk market stood at around $8 billion at the end of the year, according to Fitch Ratings—still modest compared with the global market of nearly $1 trillion, largely concentrated in Saudi Arabia, Malaysia, and the United Arab Emirates.
Bashar Al-Natoor, global head of Islamic finance at Fitch, said that issuing sukuk often requires complex legal frameworks, but Africa’s gradual engagement reflects growing interest in these financial instruments.
Economic ties are also evident in the election of Mauritanian Sidi Ould Tah as president of the African Development Bank in 2025, alongside pledges from Arab financial institutions to contribute hundreds of millions of dollars to support the Bank’s resources between 2026 and 2028. The continent faces an estimated annual financing gap of $400 billion, including more than $150 billion for infrastructure.
Didier Acouetey, adviser to the president of the African Development Bank on financial structuring, said: “Everything cannot come from the West, especially as aid declines.”
Gulf involvement extends beyond debt instruments to direct investment as well.
