As African sovereigns and corporates seek to diversify their funding sources amidst rising debt pressures, expanding infrastructure requirements and evolving investor preferences, greater attention is being paid not only to how capital is raised, but also to where it comes from.
Recent market activity has also demonstrated the resilience of Islamic capital markets during periods of heightened geopolitical uncertainty. While episodes of market volatility can temporarily delay issuance windows, high-quality issuers have continued to attract strong investor demand once markets stabilise, reinforcing Sukuk’s role as a dependable source of long-term capital even in more uncertain conditions.
The attraction extends beyond the instrument itself. For sovereigns and corporates across Africa, the appeal of Sukuk lies in expanding access to investors while adding flexibility to their funding strategies. For Gulf investors, African issuance provides exposure to new jurisdictions and credits in a market where supply outside established Sukuk centres remains relatively limited.
Current transactions across the GCC have demonstrated that investor demand for well-structured issuances remains resilient, with markets reopening quickly once periods of uncertainty begin to ease. For African issuers, this reinforces the value of maintaining diversified funding channels that can access multiple pools of international capital. Benin’s debut international Sukuk illustrates the opportunity. The USD500 million seven-year Sukuk in 2026 attracted strong demand and marked the first international Sukuk issued by a sub-Saharan African sovereign since South Africa in 2014. The transaction, on which Emirates NBD Capital acted as Joint Global Coordinator, Joint Structuring Bank and Bookrunner, broadened the sovereign’s investor base through allocations to investors across the Middle East and Asia in addition to the other global EM investors.
Access to established Islamic capital pools can extend well beyond pricing alone. By attracting participation from investors across the Middle East, the issuance demonstrated how Sukuk can help African sovereigns diversify their funding sources while building relationships with investors that support future market access.
From successful transactions to market depth
A single issuance can demonstrate investor appetite, but developing a deeper African Sukuk market will depend on the frameworks that support repeat access.
Investors typically assess transactions through several lenses: the quality of the underlying credit, legal certainty, asset suitability and the strength of the execution process. Sukuk structures need to provide clarity around these elements while aligning with established Shariah principles.
Ijara remains widely used, particularly in sovereign issuances, while Wakala structures have gained traction as issuers seek greater flexibility. In our experience, investors are generally less focused on the specific Sukuk structure where recognised Sharia approvals from large regional banks are in place, and instead focus primarily on the underlying credit, the quality of the issuer and the strength of the legal framework supporting the transaction.
For African markets, this places greater focus on practical considerations including documentation standards, tax treatment, asset identification and legal enforceability. These factors influence execution efficiency, pricing outcomes and an issuer’s ability to return to the market.
A growing role for GCC investors
The GCC remains a central part of the global Sukuk market, supported by issuance from sovereigns, financial institutions and corporates.
At a time when global capital is becoming more selective and investors are placing greater emphasis on credit quality and execution certainty, established Islamic liquidity pools offer African issuers an increasingly important source of diversified funding.
Infrastructure, energy and agriculture-related assets are among the areas that align well with Sukuk frameworks because they can support asset-linked financing structures.
Broadening the issuer base
In addition to sovereing issuances, the participation of corporates and government-linked entities will also be important in broadening the issuer base. A wider range of transactions can help strengthen investor familiarity and support greater consistency in market access.
Liquidity remains an important consideration. A significant portion of Sukuk investors follow a buy-and-hold approach, which can limit secondary market activity. Larger issuance sizes and more regular supply can support wider participation and improve price discovery gradually.
For African issuers, building a record of successful transactions will be central to attracting repeat investment. Standardised documentation, established market practices and consistent engagement with investors can support more efficient execution across future issuances.
Turning market interest into long-term participation
The opportunity for African Sukuk will be shaped by the fundamentals of market development: credible issuers, appropriate structures and investor confidence.
The GCC’s established Islamic finance markets provide African borrowers with access to a deep pool of capital, while African issuers can offer investors exposure to new jurisdictions and sectors. The development of this corridor will depend on how effectively these two sides continue to engage.
As more African sovereigns and corporates establish issuance programmes and return to the market, Sukuk has the potential to evolve from an alternative funding instrument into a lasting capital markets bridge between Africa and the GCC. The opportunity now lies not simply in executing individual transactions, but in building the confidence, consistency and market infrastructure that encourage repeat issuance and long-term investor participation.
