The Islamic financial services industry in Africa is currently dominated by banking and sukuk agreements but growth potential remains in the asset management and Takaful sectors.
In countries such as Kenya, Ethiopia and South Africa the Islamic segment of the population is increasingly demanding Islamic financial products. The ambitious regional infrastructure projects that East Africa has embarked on will need to look at alternative financial sources. Sukuk lends itself well to East Africa’s infrastructure gap because of the requirement of cash flows.
Muslim-friendly travel has evolved in recent years to become a fundamental market within the global travel sector. With the increasing availability of prayer facilities, halal restaurants and Islamic hospitality products, Muslim travellers are continuously exploring new destinations.
Halal travel in Africa offers significant growth potential for the tourism industry. Muslim tourists globally represent a major niche market—a market that has a young demographic, is growing in affluence, and is increasingly asserting its unique needs on the travel, tourism and hospitality market.
Tanzania, Zanzibar and South Africa are currently the most popular destinations, and are best equipped for the halal market, Kenya, one of Africa’s Tourism destination must tap into Halal Travel to boost its Tourism industry which has struggled to pick up in the last 5 years.
Global Muslim spending on travel is expected to reach $238bn by 2019. Africa has a small share of the halal market, representing only 5% (Europe 51%), according to Dinar Standard research signalling room for growth. There has been a 40% increase in tours to Africa year on year.
Sub-Saharan Africa regional spend on halal food was about $114bn in 2013 based on Thomson Reuters data. Emphasis has been mainly on halal meats and meat products, but over the past few years, the trend has been shifting to the introduction of halal franchises, prepared meals, canned, frozen and instant foods.
A great example for East Africa is South Africa which in spite of its small Muslim community, has emerged as one of the five largest producers of halal products worldwide largely due to its access to the rest of the Continent and the presence of highly advanced halal certification programmes (60% of all products in SA’s retailers are certified halal) worth approximately ZAR1billion ($71.7m), according to MATRADE (Malaysia External Trade Development Corporation).
East Africa member states must explore opportunities to grow its Halal Food sector, given its growing Muslim Population and its shared cultural values where Halal food is not only consumed by the Muslim community but most people in the region.
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