IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-031-59511-0_18.html
   My bibliography  Save this book chapter

Islamic Development Bank: An Instrument for Alternative Development Financing in Africa

In: Perspectives on Development Banks in Africa

Author

Listed:
  • Abdul Nashiru Issahaku

    (African Centre for Governance and Economic Management (ACGEM), Bank of Ghana)

  • Jabir Ibrahim Mohammed

    (University of Ghana Business School)

  • Sherif Sulemana

    (University of Ghana Business School)

Abstract

Islamic finance is increasingly gaining prominence in the global financial architecture. Unlike the conventional finance where interest earning constitutes significant portion of banks’ income, Islamic banking and finance promises a profit-sharing model and forbids interest earning based on shariah compliance. In this chapter, we underscore the need for using Islamic banking to finance development in Africa through a case study of the Islamic Development Bank (IsDB) model. Our study finds that out of the 57 member countries in IsDB, Africa has 27 members. Also, IsDB since its inception in 1975 has advanced over $65 billion in financing for development in Africa. It has also supported trade financing with about $20 billion. Very importantly, the chapter provides various Islamic financial products and services, the risk-mitigating mechanisms, the financing models, monitoring, evaluation, and impact assessment of projects financed by IsDB in Africa. Sukuk, is the main debt instrument used to raise money in the capital markets and it operates based on shariah principles. We find that sukuk is one of the lowest risk-bearing financial assets as compared with the conventional debt instrument. The policy implication is that Islamic finance provides a good opportunity for high debt-ridden African countries to take, especially through the issuance of sukuk, to help finance infrastructure in Africa.

Suggested Citation

  • Abdul Nashiru Issahaku & Jabir Ibrahim Mohammed & Sherif Sulemana, 2024. "Islamic Development Bank: An Instrument for Alternative Development Financing in Africa," Springer Books, in: Joshua Yindenaba Abor & Daniel Ofori-Sasu (ed.), Perspectives on Development Banks in Africa, chapter 0, pages 393-417, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-59511-0_18
    DOI: 10.1007/978-3-031-59511-0_18
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-031-59511-0_18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.