South Africa Plans Return to Islamic Market to Plug Budget Gap
- National Treasury wants to issue sukuk in current fiscal year
- Size of sale would depend on demand, timing, Treasury Says
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South Africa’s debut sale of Islamic bonds had investors clamoring for four times the amount offered. The government is hoping for more of the same as it returns to the market to help plug a budget shortfall of more than $4 billion.
Africa’s most-industrialized nation is considering a rand-denominated sukuk in the fiscal year starting April 1, after becoming the first African nation to issue a sovereign Shariah-compliant bond when it sold $500 million of securities in 2014. The rand sukuk would also set a benchmark for local corporate issuers to tap the market, according to the National Treasury.