Ivory Coast to sell debut sukuk within three months -Finance Minister
By Karin Strohecker LONDON (Reuters) - Ivory Coast will sell its debut Islamic bond in the next two to three months, and is assessing whether to make sukuk issues a regular part of fund raising, its minister for economy and finance said on Tuesday. In April, the Islamic Corporation for the Development of the Private Sector (ICD) - an arm of the Jeddah-based Islamic Development Bank - said it would lead manage Ivory Coast's inaugural sovereign sukuk, which will be denominated in CFA francs, the common currency used by eight West African nations. "We are in the process of doing due-diligence ... and we hope that we can issue in the next two, three months," Niale Kaba told Reuters on the sidelines of an investment conference in London. "This is a sukuk in local currency, and we hope to place this issue with foreign investors, and we hope this instrument will increase liquidity in our zone," Kaba added. She was referring to the CFA franc currency union which comprises Benin, Burkina-Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. Ivory Coast's 300 billion CFA franc ($500 million) Islamic bond programme will be conducted in two equal phases of 150 billion CFA francs between 2015 and 2020. "We are thinking that sukuk in CFA could constitute a good part of our portfolio from now on," Kaba said. "(But) we are still in the process of evaluating what the best composition is for our basket and we will look at this once we have completed this issue." A number of African countries - including Senegal and South Africa - have been tapping sukuk markets to take advantage of rising demand for Islamic paper among investors in the Middle East and southeast Asia. Niger and Nigeria have also been looking at issuing Islamic bonds. The sukuk will be the second time Ivory Coast taps international capital markets this year. In February, the world's top cocoa grower attracted nearly $4 billion worth of orders for its $1 billion issue - a show of renewed confidence in French-speaking West Africa and investors' hunger for yield. The recent Eurobond boom across sub-Saharan Africa has also sparked concerns. The International Monetary Fund has warned against excessive enthusiasm for borrowing, saying African countries may face exchange rate risks and problems repaying dollar-denominated debt. Developing countries across Africa were aware of this, said Kaba, but she noted the need to finance infrastructure and social development for future economic growth. Also, debt levels were not an issue for Ivory Coast, she said, noting that internal and external debt combined made up less than 40 percent of gross domestic product (GDP). "We have some room for manoeuvre ... For us, the issue is not so much raising more debt in general, but about diversification, and that is what we are doing just now," she added. ($1 = 600.1400 CFA francs)
