Dakar this past week hosted the 6th International Islamic Finance Forum (IIFF). The forum, held every two years, is a gathering of government officials from West Africa, think tanks, financial institutions and other entities involved in Islamic finance.
Its workshops, seminars and discussions on Islamic finance and the economy, in general, attract around 400 participants.
The 6th IIFF was supposed to be held in June last year. It had as its focus, Malaysia — Malaysia's success in finance, Malaysia's experience as a trailblazer in Islamic finance, and notable achievement in the halal industry.
The theme of "Malaysia-West Africa: Building The Bridge of Islamic Economy" was chosen because Senegal felt that there was much that West Africa could learn from Malaysia.
When Malaysia began its foray into Islamic finance, the term was not yet mainstream. Four decades later, Malaysia has in place a competitive and fully functioning dual-financial system. At the end of last year, the Islamic banking industry commanded 34.2 per cent of Malaysia's banking assets and is still growing exponentially.
Malaysia — the first country to issue sukuk bonds — has the lion's share, garnering 45.1 per cent of the world sukuk market, a major source of funds that can be tapped into, something which the Western African market was eyeing with enthusiasm.
If Malaysia, with its 58 per cent Muslim population, is able to develop Islamic banking to such a degree, imagine the potential of this when transposed onto a predominantly Muslim country such as Senegal, or any of the many Muslim West African countries. The beauty of all this is that Islamic banking and Islamic finance can also be used by non-Muslims.
Just imagine the potential of this sector when global Islamic finance assets are projected to grow to US$4 trillion by 2024. This is without taking into account the global halal market, estimated to be at US$3 trillion.
As the 1.8 billion Muslim ummah continues to grow, so too will the demand for shariah-compliant goods and services. Even now, non-Muslim companies, such as Japan's Ajinomoto and Southern Lion, and Swiss giant Nestle have gone halal with their manufacturing base in Malaysia.
It is these opportunities that West African countries want to tap into and be a part of. Senegal and its neighbours may have an edge if it develops its Islamic financial technology (fintech) sector.
A large swathe of the Senegal population is already connected by smartphones, but usage ranges from merely receiving calls and taking photos, to highly sophisticated use of various apps. If this sector can be developed responsibly, then the business of banking and wealth management can be exponentially offered to the 381 million people of West Africa.
This will boost the US$49 billion in fintech transactions in Organisation of Islamic Cooperation countries last year. Islamic finance can be a game changer in many developing countries because it addresses the concerns of a population that distrusts conventional banking by being shariah compliant.
For obvious reasons, the IIFF, which Senegal traditionally hosts, could not be held in June last year. But because of the low number of Covid-19 cases in West Africa, coupled with a good vaccine rollout, it was decided that the forum would go ahead on June 7 and 8, a year after its original date.
Even though the forum was held in a hybrid of online participation and physical presence, it did not draw the crowd of yesteryears. Those who participated were those who were keen on Islamic finance, and committed to developing it.
Malaysia's remarks at the opening ceremony were delivered by the minister in the Prime Minister's Department in charge of Islamic affairs. His video was well-made and impressed the audience with scenes of modern Malaysian banking. That set the tone for the rest of the forum.
As a Malaysian, I was very proud to hear the accolades heaped on Malaysia's development. But I also knew that what we are today is the product of many people's vision and hardwork. If we ever become complacent and inward looking, then other countries will surpass all that we have achieved.
The writer is a foreign service officer, who writes on international affairs with particular emphasis on Africa
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times