Islamic investors eye opportunities in Africa

Donors and businessmen from the Islamic World are increasingly determined to explore investments opportunities in Africa.

Africa is increasingly seen as a land of opportunities. After the large emerging countries such as China, India and Brazil, member countries from the Organisation of Islamic Cooperation (OIC) which groups 57 countries including 22 African states, are increasingly interested by the continent. In fact, OIC’s interest for the continent began at the moment of the creation of the organisation in 1969. But over the last years, OIC’s financial arm, the Islamic Development Bank (IDB) whose main shareholders are Saudi Arabia (23.6%), Libya (9.5%), Iran (8.3%), Nigeria (7.7%) and the United Arab Emirates (7.5%) has become increasingly involved in Africa. About 30 percent of the US $ 12 billion dollars invested in 2015 by the Islamic Development Bank, went to Sub-Saharan Africa, said its regional director, Sidi Mohamed Taleb during the Media Forum on Investment Opportunities in Africa organised by the OIC in Marrakech between the last 17 and the 19 December in Marrakech.

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According to Sidi Mohamed Taleb, the IDB’s strong point is that Africans are taking part in the definition of the Bank’s strategy which consists in investing massively in the sectors where Africa still lags behind other continents such as energy, telecoms, transports and agriculture. The bank’s objective is to tap the productivity potential and create job opportunities for the youth. Energy and infrastructures alone absorb more than half of all the loans.
The bank is particularly active in Mali where it is building a 60 MW thermal plant near Bamako and a new international airport. In this country, where the IDB’s portfolio amounts $ 400 million, the bank is also financing roads towards neighbouring Mauritania and also studies for the construction of a road between the Tuareg capital Kidal and the Algerian border, “even if the security situation is a problem because there is an absolute necessity to break the isolation of this region”, explains Sidi Mohamed Taleb. The question is not only to generate communication, growth and employment but also to create the pre-condition for all this which is political stability. In this case, the IDB is acting in coordination with the political initiatives of the OIC which has supported reconciliation missions in Mali between the government and the rebels in the same way it has supported reconciliation in Somalia, Niger, Côte d’Ivoire, the Central African Republic, Sudan and Chad.

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In the area of transports, the OIC’s flagship project in Africa is the completion of the multimodal rail-road highway between Dakar and Port Sudan. OIC’s contribution will consist in financing the construction of the missing links, explains the organisation’s assistant Secretary General, Hameed Opeloyeru. Food security is high on the OIC’s agenda. Since the creation in 2011 in Astana (Kazakhstan) of the Islamic Organisation for Food Security, US $ 1.5 billion has been pledged to finance agricultural projects jointly with the Food Agricultural Organisation and the International Fund for Agricultural Development (IFAD).
Another important initiative was the OIC Cotton Action Plan created in 2007 with a view to rehabilitate the decaying cotton and textile industries in OIC member states. So far, 27 projects were approved under this plan, including three in Cameroon and two in Mozambique and efforts are underway to mobilize financing for projects submitted by Senegal, Uganda, Nigeria and Burkina Faso.

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Beside the multilateral interventions of the OIC and the IDB, several Islamic countries have developed commercial and investment ties with Africa over the last years. Turkey has already held two summits with Africa in 2008, in Istanbul and in 2014 in Malabo (Equatorial Guinea). Turkish Airlines was one of the first countries to resume international flights to Somalia in 2011. Since 2003, trade volume rose nearly four fold from US $ 5.4 billion to $ 20 billion in 2014 and the Ankara government has opened 40 embassies in the continent.  Morocco banks, insurance and agribusiness are expanding fast in Africa. One of the reasons is that the improvement of bank services in the Sub-Saharan African countries helps to boost the activities of Moroccan exporters. The Attijawariwafa Bank has now subsidiaries and branches in 14 African countries including Guinea-Conakry, Senegal, Côte d’Ivoire, Burkina Faso and Mali. The world leader of fertilizers, the Office chérifien des phosphates (OCP), is keen to support Africa’s green revolution and it is therefore promoting its products in order to boost productivity in the South of the Sahara. OCP has embarked on a programme which aims at providing access to improved fertilizers to 100,000 African farmers during the next three years, through the initiative of “agricultural caravans” aiming at providing training to farmers of Guinea-Conakry, Mali and Senegal.

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According to the director of the Casablanca-based ISCEA management school, Rachid M’Rabet, who created a similar institution in Guinée-Conakry, Moroccan companies’ comparative advantage is that they are African and that their managers understand the culture of Sub-Saharan countries. Another symptom of the development of business links with the Islamic World is the expansion of the networks of Turkish Airlines which has now 44 African destinations, of Royal Air Maroc which has 22 and Emirates Airlines which has 19. The 21st century is definitely the period of economic diversification for Africa which is no longer the former European colonizers’ hunting ground.

 François Misser 






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