Sukuk, a sharia-compliant bond-like instrument that is used in Islamic finance, is becoming more popular among investors seeking alternative investments.
“There is a notion in the public that bond markets are for big investors with a lot of money, but these new instruments show that even individuals and small businesses can be part of this asset trading,” said KCB Bank’s head of Islamic banking, Amour Muro.
With a minimum initial investment amount of Sh500,000, the bond is feasible for retail investors.
KCB Bank Plc issued the Sukuk bond on November 9 of this month.
With an offer of Sh10 billion, the three-year investment has an expected return of 8.75 percent per annum.
Last year, Tanzania’s first Sukuk bond, issued by Islamic facility Imaan Finance Limited, was privately placed and received 36 percent oversubscription after receiving Sh2.72 billion in bids against an offer of Sh2 billion.
Mr Muro said the introduction of the Sukuk bond in the market will be a blueprint for price discovery in the bond market.
According to Ahmed Nganya, capital markets manager at Vertex International Securities Ltd, the issuance allows both Muslim and non-Muslim investors to invest in public sharia-compliant financial products.
He said that Sukuk offers a more liquidity-friendly solution for investors than most products, which pay semi-annually and annually and are tax-free.
Though it is similar to conventional corporate bonds in terms of the parties involved and the purpose of the bond issuance, sukuk offers some key structural differences due to the fact that it is an economic and equitable joint venture between the issuer and the investors (Sukuk bondholders).
This means that the assets acquired by the Sukuk bond issuance will be jointly owned and managed to generate profits, which are then used to repay the participating bondholders.
According to Exodus Advisory’s chief executive, Ramadhani Kagwandi, it is encouraging that the market now offers other options apart from the usual listed equities and corporate bonds.
He said the new instrument attracts more retail participants in the financial markets.
Global Alpha Capital Limited’s chief executive, Gerase Kamugisha, said there has also been an improvement in public awareness of financial literacy, thus enticing people to participate in the market.
“Previously, banks used to inject more funds into Treasury bills and bonds, leaving little funding to the private sector… We now see a shift through the introduction of corporate bonds to specific causes; banks are now returning funds to the financing of the private sector through credits,” said Kamugisha.
With the series of online and network marketing scam schemes that have been prevalent in the country, it is safe to say it would take more than one message to convince locals to enter the financial markets.
“It’s a good strategy for financial inclusion and injecting people into the formal system, but more awareness needs to be emphasized, and this can be done by those financial institutions and the government,” says Mr Muro.
According to the Capital Markets and Securities Authority (CMSA), public awareness of financial literacy programs is one of the priorities in promoting the growth of the capital markets investor base and inclusion.
According to their Five-Year Strategic Plan for 2018/2019 – 2022/2023, these programs include media and digital campaigns and educational campaigns at universities and other higher learning institutions.
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Tanzania Confirms Outbreak of Marburg Virus Disease
Dodoma — Tanzania today confirmed an outbreak of Marburg virus disease in the northwestern Kagera region after one case tested positive for the virus following investigations and laboratory analysis of suspected cases of the disease.
President of the Republic of Tanzania, Her Excellency Samia Suluhu Hassan, made the announcement during a press briefing alongside World Health Organization (WHO) Director-General, Dr Tedros Adhanom Ghebreyesus, in the country’s administrative capital Dodoma.
“Laboratory tests conducted in Kabaile Mobile Laboratory in Kagera and later confirmed in Dar es Salaam identified one patient as being infected with the Marburg virus. Fortunately, the remaining suspected patients tested negative,” the president said. “We have demonstrated in the past our ability to contain a similar outbreak and are determined to do the same this time around.”
A total of 25 suspected cases have been reported as of 20 January 2025, all of whom have tested negative and are currently under close follow-up, the president said. The cases have been reported in Biharamulo and Muleba districts in Kagera.
“We have resolved to reassure the general public in Tanzania and the international community as a whole of our collective determination to address the global health challenges, including the Marburg virus disease,” said H.E President Hassan.
WHO is supporting Tanzanian health authorities to enhance key outbreak control measures including disease surveillance, testing, treatment, infection prevention and control, case management, as well as increasing public awareness among communities to prevent further spread of the virus.
“WHO, working with its partners, is committed to supporting the government of Tanzania to bring the outbreak under control as soon as possible, and to build a healthier, safer, fairer future for all the people of Tanzania,” said Dr Tedros. “Now is a time for collaboration, and commitment, to protecting the health of all people in Tanzania, and the region, from the risks posed by this disease.”
Marburg virus disease is highly virulent and causes haemorrhagic fever. It belongs to the same family as the virus that causes Ebola virus disease. Illness caused by Marburg virus begins abruptly. Patients present with high fever, severe headache and severe malaise. They may develop severe haemorrhagic symptoms within seven days.
“The declaration by the president and the measures being taken by the government are crucial in addressing the threat of this disease at the local and national levels as well as preventing potential cross-border spread,” said Dr Matshidiso Moeti, WHO Regional Director for Africa. “Our priority is to support the government to rapidly scale up measures to effectively respond to this outbreak and safeguard the health of the population,”
Tanzania previously reported an outbreak of Marburg in March 2023 – the country’s first – in Kagera region, in which a total of nine cases (eight confirmed and one probable) and six deaths were reported, with a case fatality ratio of 67%.
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In the African region, previous outbreaks and sporadic cases have been reported in Angola, the Democratic Republic of the Congo, Ghana, Kenya, Equatorial Guinea, Rwanda, South Africa and Uganda.
Marburg virus is transmitted to people from fruit bats and spreads among humans through direct contact with the bodily fluids of infected people, surfaces and materials. Although several promising candidate medical countermeasures are currently undergoing clinical trials, there is no licensed treatment or vaccine for effective management or prevention of Marburg virus disease. However, early access to treatment and supportive care – rehydration with oral or intravenous fluids – and treatment of specific symptoms, improve survival.
Source: allafrica.com
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