Unguja. Twelve major investment projects valued at Sh1.115 trillion are poised to benefit from the recent launch of Zanzibar’s Islamic bonds, known as Sukuk.
These strategic projects aim to enhance the island’s infrastructure and stimulate economic growth, covering several crucial sectors. The initiatives are distributed among various ministries: three projects under the Ministry of Blue Economy and Fisheries, seven under the Ministry of Works, Communications, and Transport, and one each under the Ministries of Health, Water, and Energy and Minerals.
The Sukuk initiative commenced officially on February 22, 2025, with the registration process opening on March 8, 2025, and subscription continuing until April 6, 2025.
The CEO of Yusra Sukuk Co. Ltd. stated that the funds generated from the Sukuk will be directly invested into these key projects. He underscored the transformative potential of these projects, which are designed to provide long-lasting benefits to Zanzibar and ensure transparency in public fund management.
Highlighted projects include the construction of fish markets in Kama, Fungu Refu, and Mkoani, alongside the significant establishment of Binguni Hospital aimed at enhancing healthcare services. The initiative also focuses on reducing electricity losses in the region.
A considerable portion of the Sukuk funds will target road infrastructure, featuring projects such as the seven-kilometre Mchomanne-Wawi to Votongoi road and the 23-kilometre Chwaka to Kilindi Market road. Additional road enhancements will occur in Kizimbani, Kiboje, Unguja Ukuu, and Makunduchi, totaling an investment of Sh498.4 billion for all road projects.
Other pivotal developments include the Mangapwani port project, estimated at Sh399.8 billion, and the construction of Terminal 2 at Zanzibar Airport, with a projected cost of Sh62.4 billion.
Funds will also be allocated for Sukuk investors, requiring Sh159 billion for payouts. The Sukuk model is highlighted for its appeal due to the avoidance of interest, tax deductions, and adherence to Islamic principles, offering an ethical investment avenue for both local and international stakeholders.
The Minister of State in the President’s Office for Finance and Planning praised the Sukuk initiative as a revolutionary approach to Zanzibar’s economic growth.
Investor interest has surged significantly, with local and international participation, including endorsements from prominent leaders who have already committed investments.
To manage the funds raised, a dedicated government company will ensure efficient allocation towards infrastructure projects. Additionally, discussions are underway about creating a specialized investment window to enable government employees to invest in Sukuk using resources from the Zanzibar Social Security Fund (ZSSF), enhancing conditions for attracting foreign investments.
The government encourages individual investments through the Sukuk system, positioning it as an attractive option for public employees alongside their ZSSF contributions while engaging stakeholders in tourism to foster investment opportunities.
“This investment opportunity starts with a minimum contribution of Sh1 million, and for those below this threshold, forming investment groups remains a practical solution,” the Minister emphasized.
