NAIROBI, Kenya, Jul 6 – Kenya has shelved plans to issue the first Islamic bond to next year.
The country’s National Treasury Cabinet Secretary Henry Rotich says the bond which got approval in the 2017/18 Finance Bill may not be ready for issuance in the current financial year.
Kenya had planned to launch it in May 2017.
The move will see the country depending with other sources of financing that include sovereign bonds.
The country is however committed to issuing the bond in a bid to deepen Islamic products in the market.
Plans for issuance of the bond have been in the works since 2014.
An Islamic bond works by giving investors a share of the returns that are generated by the underlying asset, rather than guaranteeing them interest, which would infringe on Islamic law.
The issuance of the bond would see Kenya join Gambia, Senegal, Sudan and the United Kingdom that have issued the Islamic facility.