BAHRAIN (Reuters) - Tunisia’s government plans to issue the country’s first Islamic bond this year as it works to finance a budget deficit swollen by last year’s revolution, a senior Arab banker said on Wednesday.
“The Tunisian government is planning to issue an Islamic sovereign bond before the end of this year,” said Adnan Ahmed Yousif, chief executive of Bahrain-based Al Baraka Banking Group, an Islamic banking conglomerate with operations across North Africa.
“They’re very serious about it and are now in talks with banks. It will be Tunisia’s first sovereign sukuk,” Yousif, also chairman of the Beirut-based Union of Arab Banks, an industry association, told Reuters.
Al Baraka Bank has branches in Tunisia and is consulting with the government on Islamic finance. Tunisian finance ministry officials could not be reached for comment.
Before last year’s uprisings in North Africa, authoritarian governments restricted or refused to promote Islamic finance for political reasons. In the wake of the regime changes, growth in the industry is expected to accelerate.
A moderate Islamist party now dominates Tunisia’s government, which expects its budget deficit to rise to 6 percent of gross domestic product in 2012 from an estimated 4.5 percent for 2011 as it boosts spending to revitalise the economy after the turmoil of the revolution.
A sukuk issue could allow Tunisia to tap a pool of billions of dollars of Islamic investment funds in the wealthy Arab Gulf.
“I believe Tunisia has the potential to become the Islamic finance hub for Africa. It’s working towards having all the requirements needed for that,” Yousif said.
The Egyptian government is preparing to raise about $2 billion through its first issue of Islamic bonds, Sheikh Hussein Hamed Hassan, an Islamic scholar familiar with its planning, told Reuters this month.