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Senegal
Senegal takes steps to become west
Africa’s leader in Islamic finance
By Dr Abdou Diaw
Senegal is a member of the West African Economic and
Monetary Union (WAEMU) which regroups the Francophone
countries (except Guinea Conakry) in West Africa. In 2010
according to IMF data, the size of the Senegalese population
was 12.4 million with a GNP per capita of US$1,090;
making Senegal the second-largest economy in the region
(accounting for 19% of WAEMU’s total GNP) behind Côte
d’Ivoire (32.3% of total GNP). Senegal appears to be one of the
most stable countries in Africa, as testified by the regularity
of its various elections for more than three decades, and
the occurrence of democratic changes in power whereby
the ruling party lost the presidential election in 2000 and
in 2012. Even though the vast majority of the population is
Muslim (around 95%) Islamic finance is underdeveloped in
Senegal. There is only one Islamic bank, Banque Islamique
du Sénégal, which has yet to make all its products and
operations Shariah compliant; and one Islamic window for
a microfinance institution, PAMECAS (Partenariat pour la
Mobilisation de l’Epargne et du Crédit au Sénégal).
2012: A review
Over the last few years, Senegalese authorities have shown
a particular interest in Islamic finance. This interest has been
translated into several initiatives that aim to promote an effective
implementation of Islamic finance in the country. In the next
few paragraphs we present some important initiatives related
to Islamic finance that took place in the country during 2012, at
public and private levels.
Public level
An international consulting firm was commissioned by the
Senegalese economic and finance ministry, in collaboration with
the IDB, to study the compatibility of the common regulatory and
fiscal system with Islamic finance. The study was completed
and a seminar was held in Dakar on the 22 nd -23 rd June 2012 to
present the results to the stakeholders. An ad hoc committee is
to be established to follow up the implementation of the needed
reforms as recommended by the study.
nature as the IDB has already collaborated with the Senegalese
state to finance PALAM, a project which aims at reducing poverty
among the rural and women population through microfinance
and alphabetization.
Another major Islamic finance-related event concerning Senegal
is the signing of a tripartite MoU on the 19 th September in
Kuala Lumpur, between the International Center for Education
in Islamic Finance (INCEIF), the Islamic Corporation for the
Development of the Private Sector (ICD) and the Centre Africain
d’Etudes Supérieures en Gestion (CESAG), the Dakar-based
training arm of BCEAO, to set up an Islamic Finance Academy to
provide capacity-building in Islamic finance in French-speaking
West Africa.
Private level
Many private business schools in Dakar have introduced Islamic
finance as a subject in their Master of Finance programs. Similarly,
there are several consultancy firms that were set up in Senegal
to provide advisory and training services for professionals. Thus,
during 2012 many seminars on Islamic finance were held in
different hotels of Dakar.
2013: A preview
With the IDB-BCEAO master agreement one may expect, for
the coming year, some adjustments in the regulatory framework
to accommodate the specificities of Islamic finance. This is
particularly plausible if we take into consideration the fact that
many demands for license to establish Islamic financial institution
are coming on the table of BCEAO inside as well as outside
Senegal. For instance, the ICD’s CEO, Mr Khalid Aboodi, has
announced the launch of new Islamic banks in two WAEMU
countries, Mali and Benin, in 2013. He has also announced
the issuance of US$200 million worth of Sukuk by the State of
consulting www.IslamicFinanceConsulting.com
www.IslamicFinanceEvents.com
Senegal in 2013.
www.IslamicFinanceNews.com
www.IslamicFinanceTraining.com
www.MIFforum.com
www.MIFmonthly.com
www.MIFtraining.com
www.REDmoneyBooks.com
Dr Abdou Diaw is a lecturer and consultant in Islamic finance at
Sup de Co Dakar. He can be contacted at abdoulkarimdiaw@
yahoo.com.
Furthermore, on the 7 th September 2012 the Banque Centrale
Des Etats de l’Afrique de l’Ouest (BCEAO), which is the
common central bank of the WAEMU countries, signed a master
agreement with the IDB for the promotion of Islamic finance in
the Union. According to this agreement, the IDB will provide
technical assistance to BCEAO for a smooth development of this
alternative finance in WAEMU zone and will facilitate cooperation
and exchange between BCEAO and the standard-setting bodies
in the Islamic finance industry. During the signature ceremony, the
governor of BCEAO expressed the commitment of his institution
to implement the necessary adjustments in the regulatory
framework to take into account the specificities of Islamic finance.
In the same period, the president of the IDB, Dr Ali Mohamed Ali,
came to an agreement with the Senegalese minister of economy
and finance to establish a fully-fledged Islamic microfinance
institution that shall cover several countries in West Africa. It is
worth noting that this initiative will be the second initiative of its
46 February 2013