Niger considers reviving Sukuk program

Jumping on the bandwagon alongside Senegal, Togo and Ivory Coast, Niger could very well be the fourth West African country to be issuing Sukuk. MARC ROUSSOT discovers that despite the lack of a precise timeline being announced, the sovereign is mulling an issuance, potentially in 2018.

Niger’s plan to establish a Sukuk program, which has been several years in the making, has never been abandoned, rather, it was put on hold. The sovereign is considering discussing this topic with the IMF as part of the implementation of its economic and financial programs, which include the possibility of raising funds by tapping the capital markets.

In this context, a technical advisor has been appointed to set up a new strategy for the mobilization of financial resources through the utilization of conventional or Shariah compliant instruments, including Sukuk.

“As of today, it is difficult to share a precise timeline as well as the characteristics of a potential Sukuk issuance,” Maman Laouali Abdou Rafa, the general manager for financial operations and reforms at the Ministry of Finance, explained to IFN. Yet, very recently in August, Amadou Altine, the finance minister’s chief of staff, told IFN that should a decision be taken to issue Sukuk, the auction could happen as early as 2018.

The initial program
Niger has been considering the issuance of Sukuk for several years. Back in February 2015, Amadou Boubacar Cisse, the minister of economic planning, land management and community development, signed an agreement with Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD) to set up a Sukuk program worth an aggregate principal amount of XOF150 billion (US$273.47 million).

This program was planned for implementation before 2020 with the issuance of tranches amounting to XOF75 billion (US$136.73 million). “Preliminary discussions had already occurred with the IDB but the structure of the Sukuk had yet to be decided,” affirms Maman. In the end, both Niger and the IDB agreed that the right conditions were not met to fully follow through the said issuance.

“Whenever we sign an agreement, we do not push the government to issue Sukuk regardless of the situation,” explains Khaled. “We are not bringing money from the ICD but from the private sector, therefore we have to be convinced that there would be sufficient appetite from investors and for all conditions to be met, ensuring a successful issuance. We hope that the situation will soon improve, enabling the both of us to go back to the drawing board,” he says.

IFN understands that the ICD is not involved in Niger’s ongoing Sukuk plan, although “the help of the IDB as well as other regional or international financial intermediaries could be requested,” Maman states.

This article first appeared in IFN Volume 14 Issue 39 on the 27th of September 2017


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