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Zambia Joins $150B Sukuk Market with Eden Villas' $3 Million Real Estate Issuance

Zambian developer Eden Villas Properties is set to issue the country's inaugural Sukuk, aiming to raise $3 million. Sukuk, or Islamic bonds, comply with Islamic law prohibiting interest. By 2023, the global Sukuk market reached approximately $150 billion, growing at a 10% CAGR. Despite fewer than 3% of Zambians being Muslim, this initiative targets Middle Eastern investors. UAE and Saudi Arabian investments in Africa exceeded $2 billion in 2023, highlighting regional interest in the Continent's economic potential.

Zambian property developer, Eden Villas Properties, a subsidiary of Egypt-owned real estate company Emix Elite Standard, has been approved to be the first issuer of Sukuk in the country, with plans to raise up to $3 million through a Sukuk issuance.

Sukuk, often referred to as Islamic bonds, are financial certificates that comply with Islamic law and its investment principles, which prohibit the charging or paying of interest. Interestingly, the Bible also has restrictions on charging interest but permits it in the New Testament while emphasizing generosity and fairness.

The global Sukuk market has seen significant growth in recent years. According to a report by the Islamic Development Bank, the total issuance of Sukuk worldwide reached $147.4 billion in 2019, up from $123.1 billion in 2018. By 2023, the market size had reached approximately $150 billion, with a compound annual growth rate (CAGR) of around 10% over the past decade.


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The Middle East and Southeast Asia, particularly countries like Saudi Arabia, Malaysia, and the United Arab Emirates, are leading markets for Sukuk issuances. In 2022, the Gulf Cooperation Council ("GCC") countries and Malaysia accounted for nearly 80% of total global Sukuk issuance, making the opening of Zambia to this funding mechanism potentially very noteworthy.

Sukuk funding isn't new to Africa, with notable initiatives including Nigeria raising over $350 million through Sukuk in 2020 to finance road projects. South Africa issued its first Sukuk in 2014, raising $500 million, and has continued to explore this financing avenue to attract investments from the Middle East and other regions with significant Muslim populations. Similarly, Senegal issued its first Sukuk in 2014.

Real estate is a primary beneficiary of Sukuk funding, accounting for a third of Sukuk issuances each year. The tangible nature of real estate makes it easier to structure Sukuk in a Shariah-compliant manner, while real estate generally offers stable returns and income, diversification benefits, Shariah compliance, and high demand.

Despite fewer than 3% of Zambians being Muslims, the introduction of Sukuk in the country's real estate market could significantly enhance its capital markets' appeal to the Middle East, where there has been a notable influx of capital into Africa recently. In 2023 alone, investments from the United Arab Emirates ("UAE") and Saudi Arabia in African markets surpassed $2 billion, showcasing the growing interest in the continent's economic potential.

This development could potentially open up new avenues for capital inflow into Zambia, fostering economic growth and development.




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