Outstanding African sukuk surpassed $7 billion in August 2026, with Egypt, Nigeria, South Africa, and Benin leading issuance, according to Fitch Ratings. Fitch said the milestone reflects steady growth but highlighted that Africa’s sukuk market remains small and constrained, accounting for less than 1% of the global sukuk outstanding due to structural limitations.
Despite this growth, Fitch noted that Africa’s sukuk market remains underdeveloped, accounting for less than 1%—approximately 0.6%—of the global sukuk outstanding. The rating agency described the market as “infrequent and nascent,” emphasizing its limited scale compared with established sukuk hubs in the Gulf and Asia.
Outstanding African sukuk reached about $7 billion in August 2026, marking a 16% increase from the previous year, Fitch Ratings reported.
The African sukuk market is concentrated in a handful of countries. Egypt leads with roughly 48% of the outstanding sukuk value, followed by Nigeria at 26%, South Africa at 15%, and Benin at 7%, according to Fitch data. Together, Egypt, Nigeria, and South Africa have issued about 70% of Africa’s sukuk since 2014. Only eight African sovereigns—Egypt, Nigeria, South Africa, Senegal, Togo, Morocco, Mali, and Côte d’Ivoire—have issued sukuk at all during the past decade, with a combined sovereign sukuk volume of approximately $6.6 billion, records show.
Fitch attributed the limited growth and concentration to a lack of enabling regulation in most African countries, creating a “legal and structural vacuum” that deters issuers. The agency highlighted that domestic Islamic financial institutions are either small or absent in many jurisdictions, reducing the natural investor base that typically supports sukuk markets. Additionally, underdeveloped domestic debt capital markets and thin local bond markets constrain the development of a deeper sukuk ecosystem, Fitch said. Conventional bonds continue to dominate funding strategies across the continent, with sukuk remaining a niche instrument primarily used by countries that have implemented specific regulatory frameworks.
The complexity of Islamic legal (Sharia) requirements also contributes to the slow adoption of sukuk, Fitch noted. The design and structuring of compliant sukuk are more demanding than conventional bonds, which has led to hesitancy among many African sovereigns. The agency observed that fresh sukuk issuance has declined in some recent periods, despite the overall stock rising, underscoring the infrequency and reliance on a small group of sovereigns. For example, Nigeria, South Africa, and Egypt raised about $3.045 billion through three sukuk issuances in 2023 and 2024, illustrating how large deals from major economies dominate the market.
Egypt’s emergence as a regular international sukuk issuer marks a significant development, Fitch said. The country issued its debut U.S. dollar sovereign sukuk in 2023, supported by regulatory reforms and stronger financial ties with Gulf Cooperation Council (GCC) countries. Nigeria has used sukuk repeatedly to fund infrastructure and plans additional government sukuk in its 2024 issuance calendar, although volumes remain modest relative to its overall debt needs. South Africa has also issued U.S. dollar sukuk internationally, including a $500 million transaction, but has yet to establish a continuous sukuk curve comparable to its conventional bond market. Benin’s debut $500 million international sukuk attracted more than $7 billion in orders, demonstrating strong investor demand, though such transactions remain rare.
Fitch highlighted the opportunity for African issuers to diversify funding by tapping into the strong liquidity available in GCC markets, where Islamic investors actively seek Sharia-compliant assets. However, the agency cautioned that access to these investors is limited by domestic structural weaknesses, including patchy legal frameworks and limited experience in structuring transactions that meet international Sharia standards. Analysts cited by Fitch emphasized that sustained engagement with GCC investors and multilateral institutions will be necessary to build a track record that attracts repeat participation.
Some African countries are only beginning to address these challenges. Algeria is reportedly putting legal frameworks in place to support its first sukuk issuance, while many low-income African states remain in the preparatory stages, relying on technical assistance from organizations such as the African Legal Support Facility to close regulatory gaps.
Fitch concluded that the African sukuk market could grow beyond its current $7 billion base, but that significant structural reforms are required. These include establishing enabling sukuk laws and clear Sharia-compliant frameworks, developing domestic Islamic banking and takaful sectors to provide anchor investors, and deepening domestic debt capital markets through local-currency yield curves and secondary-market infrastructure. Without such reforms, sukuk is expected to remain a niche funding tool, used opportunistically by a limited number of sovereigns despite the availability of external liquidity from GCC investors.
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