Ivory Coast launches sovereign Sukuk to capture Gulf Wealth

Ivory Coast – one of the most advanced economies of the West African region – is hoping to attract Gulf wealth with the launch of its inaugural sovereign Sukuk as the country positions itself to broaden its funding pool by joining its peers in the Islamic finance space.

Heavily dependent on agriculture, the Republic whose economy was significantly affected by decade-long civil unrest is seeing an emergence of its former glory days under the presidency of Alassane Ouattara, who was recently re-elected for a second term and has vowed to boost financial inclusion.

Launched yesterday by Nialé Kaba, Ivory Coast’s minister of economy and finance, the CFA150 billion (US$243.15 million) five-year Sukuk facility is part of a program arranged by the Islamic Corporation for the Development of the Private Sector and comprises two equal tranches which will be issued over the 2015-20 period. Proceeds will be channeled toward the country’s robust investment project pipeline.

Regional appeal was an apparent theme in the structuring of the deal which is to be issued in the West African CFA franc at a yearly 5.75% profit rate and has been marketed to Gulf investors. Kaba in her speech indicated that the latest upgrade of the Republic’s sovereign rating to ‘Ba3’ from ‘B1’ by Moody’s was a major selling point during the Sukuk roadshow in Saudi Arabia.

With deep infrastructure needs, Africa has been looking toward the Middle East for financing needs; likewise, Gulf and global investors are increasingly parking their investments in the resource-rich region. Nations such as Senegal, South Africa and Gambia have issued Sukuk in the hopes of making headway in the Islamic financing space and capturing the Shariah dollar.

Source: IFN Daily Alert.