Zanzibar Launches Groundbreaking Sukuk Bond to Raise Sh1.1 Trillion for Development Projects
Dar es Salaam – Zanzibar’s President, Dr. Hussein Mwinyi, has officially unveiled a Sukuk bond initiative aimed at raising Sh1.1 trillion to finance vital development projects in the region.
The Sukuk bond is a financial instrument designed in accordance with Sharia law, providing a solution to the funding challenges faced in implementing development projects across the Isles. Unlike traditional bonds that incur interest payments, Sukuk structures are rooted in Islamic principles that promote ethical investing, fairness, and profit-sharing.
Key projects earmarked for funding through this innovative bond include the construction of Terminal 4 at Abeid Amani Karume International Airport, residential developments in Unguja and Pemba, a state-of-the-art fish market, and the acquisition of large fishing vessels.
Addressing attendees during a live broadcast on February 22, 2025, Dr. Mwinyi stressed the inadequacies of the current budgetary framework, prompting the government to explore alternative Sharia-compliant funding sources. He noted the successful adoption of similar funding mechanisms in developing nations such as Malaysia and Nigeria.
"After a comprehensive analysis and in response to community needs, the government has resolved to implement this system," stated Dr. Mwinyi. He also underscored the widespread use of Sukuk by development banks, which has drawn significant interest from investors.
Highlighting Malaysia’s success, Dr. Mwinyi pointed out the potential for Zanzibar and the wider East African region to catch up with other countries that are harnessing similar financial strategies.
"This Sukuk bond marks a first not just for Zanzibar but for all East African Community countries," he added, mentioning that the initiative is open to both Muslim and non-Muslim investors with a minimum entry of Sh1 million, making it widely accessible.
"I express my gratitude to all who are investing in Zanzibar’s development and economic growth," he noted.
Dr. Saada Mkuya, Minister of State in the President’s Office for Finance and Planning, elaborated that the Sukuk bonds adhere strictly to Islamic principles while being inclusive for non-Muslims. She highlighted the considerable public interest in the bond and its potential impact on accelerating development in the region.
“This is the right moment for such an initiative,” Dr. Mkuya remarked, emphasizing growing economic conditions that support mindful investment aligned with personal faith.
Dr. Khalid Mohamed, Minister of Infrastructure, Communication, and Transport, stated that the Sukuk bond will provide significant support to the construction sector, which is in dire need of funding for numerous projects. He encouraged local citizens and the diaspora to invest, steering clear of unproductive savings and ventures.
"This bond is safe and promises numerous advantages," he affirmed.
