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May 21, 2018

Islamic finance can make Kenya regional powerhouse, says PS

National Treasury PS Kamau Thugge with Kenya Revenue Authority Commissioner general John Njiraini during the International Tax stamp Forum in Nairobi on May 9,2018../ENOS TECHE
National Treasury PS Kamau Thugge with Kenya Revenue Authority Commissioner general John Njiraini during the International Tax stamp Forum in Nairobi on May 9,2018../ENOS TECHE

Islamic finance can help Kenya position itself as a regional hub and contribute to the success of the Big Four agenda, Treasury PS Kamau Thugge has said.

In a statement read on his behalf by Chief Administrative Secretary Nicholas Gaichuhie, Thugge said Islamic finance complements conventional methods.

The statement was read during the official opening of a stakeholders forum in the finance sector at the Kenya School of Monetary Studies.

Treasury, the Islamic Financial Services Board and joint financial sector regulators are hosting a three-day regional Islamic Financial Services Board workshop targeting key stakeholders in the region to discuss Islamic finance principles and standards.

Figures released by the Islamic Finance Services Board in 2017 show the total industry assets stood at an estimated $1.9 trillion (Sh190 trillion), accounting for more than one per cent of the total global assets.

Thugge said the government is keen on positioning the region as an international financial centre for capital flows.

About 10 per cent of Kenyans are Muslims and there are non-Muslims who use Islamic finance products and services because of the principle of fairness associated with them.

"The region can take advantage of such products as suck (Islamic bonds), shariah-compliant equity products and retirement schemes, takable (insurance) products and sacco products to deepen and broaden the operation of the region’s financial sector," Thugge said.

He said the government has launched a task force of 11 members on Distributed Ledgers and Artificial Intelligence to help develop policies and guidelines for the use of block chain technology in fields including Islamic finance.

The task force will analyse upcoming digital technologies with potential to transform the economy.

A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.

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