Nasdaq Dubai and the Nairobi Securities Exchange have signed a Memorandum of Understanding, MoU, to facilitate the creation of a Sukuk sector in Kenya.

So far, no Sukuk has been issued in the East African region, however the Kenyan government has previously made known its intention to raise funds through the issuance of Sukuk, including making necessary amendments to its laws to facilitate the product earlier this year.

The MoU was signed in Dubai by Hamed Ali, Chief Executive of Nasdaq Dubai, and Geoffrey Odundo, Chief Executive of the Nairobi Securities Exchange.

Ali said, "As the region's international exchange with growing links to African countries, Nasdaq Dubai looks forward to supporting the Nairobi Securities Exchange, the Kenyan government and the country’s capital markets community as they develop a thriving Sukuk sector. By cooperating and sharing our respective expertise, the two exchanges will provide powerful support for the growth of Islamic finance in Kenya."

Odundo said, "We look forward to benefiting from Nasdaq Dubai’s extensive experience as a global leader in Islamic finance as we build our own Sukuk sector in Kenya by promoting issuance and listing as well as attracting local and international investors. The development of the Islamic capital markets can provide significant support for funding national development and growth while strengthening our international relationships."

Nasdaq Dubai is one of the largest exchanges in the world for Sukuk, with listings valued at 50.8 billion US Dollars from international and regional issuers, including governments, multilateral institutions and private entities.

The MoU is the latest development in the growth of Islamic finance in Africa. Other recent steps include a Sukuk transaction on Nasdaq Dubai’s Murabaha financing platform carried out in February 2017 by the Africa Finance Corporation. Countries that have issued inaugural Sukuk in recent years include South Africa, Ivory Coast, Senegal and Togo.