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Morocco to resume sukuk issuance, says central bank governor
Morocco is preparing its second Islamic bond, or sukuk, issuance since 2018, Central Bank Governor Abdellatif Jouahri said on Thursday.
The central bank and the ministry of finance are reviewing the technical aspects of the issuance, Jouahri told reporters without offering details on the amount of the bond.
The Higher Council of Ulema, Morocco's top religious authority, will assess whether the issuance complies with sharia, he said on the sidelines of the annual meeting of the Islamic Financial Services Board, a Malaysia-based international standards-setting body that promotes Islamic finance.
Morocco's first sukuk issuance in 2018 raised 1 billion dirhams (approximately $110 million) and matured in 2023.
The country permitted Islamic finance, locally known as participatory banking, in 2017 as part of a wider plan to bolster financial market liquidity and attract foreign investment.
However, Islamic finance remains a small segment of Morocco's banking sector, accounting for just 2% of total bank assets, Jouahri said.
Moroccan Islamic banks have extended 35 billion dirhams in credit but have only attracted 12 billion dirhams in deposits since their launch, demonstrating a persistent "liquidity problem," he said.
Despite its small scale, Morocco's Islamic finance sector posted the second-fastest asset growth globally at 27.6% over 2019-2024, according to the IFSB's latest report.
Developing a robust government sukuk market should be Morocco's next focus to develop Islamic finance, Secretary General of the IFSB Ghiat Shabsigh told Reuters.
Morocco's "cautious approach" to Islamic finance could serve as a model for countries in Sub-Saharan Africa and Central Asia where the IFSB aims to expand its foothold, he said.
(Reporting by Ahmed Eljechtimi, Editing by Louise Heavens)
