Senegal and members of the West African Economic and Monetary Union (also known as the UEMOA region) have completed a review of the region’s financial regulations, aiming to launch Islamic financial services later this year.

The review, completed by the international consultancy IFAAS (Islamic Finance Advisory & Assurance Services), was commissioned by the Senegal Ministry of Finance with the support of the Jeddah-based Islamic Development Bank (IDB).

IFAAS, with the support of local taxation and legal experts, undertook a comprehensive review of the entire region’s financial sector and the regulations pertaining to the banking, insurance, microfinance, securities and capital markets industries.

The Senegalese tax laws were also reviewed to identify potential barriers that may impede the development of Islamic finance in Senegal and the UEMOA region.

The review was completed by IFAAS in close consultation with the relevant local and regional authorities and the findings were presented last week at a two-day workshop in the Senegalese capital, Dakar.

Over 80 senior officials from various authorities of the UEMOA member countries attended the workshop organised by the Senegalese Ministry of Economy and Finance and supported by Islamic development Bank.

During the workshop, IFAAS set out a roadmap of the regulatory changes required to facilitate the introduction of Islamic financial services across the region.  With similar experience in several other regions, IFAAS has recommended a phased implementation of the required changes.

This is to be supported by a pragmatic and progressive approach in order to avoid destabilising the existing financial system.  The proposed approach also aims to ensure a level playing field for Islamic Finance providers across all eight of the UEMOA countries.

Oulimata Diop, director of the Money and Credit Directorate of the Ministry of Economy and Finance of Senegal, said: “The integration of Islamic Finance into the regional financial system is very much possible on the basis of the current legislation. This finding is highly reassuring for the stakeholders that the implementation of Islamic finance in the region will not require highly complex reforms. IFAAS recommendations are very pragmatic and simple to follow.”

The representatives of the relevant authorities from different countries of the UEMOA region also expressed their satisfaction with the results and recommendations presented by IFAAS.

Farrukh Raza, managing director of IFAAS said: “It is an honour for us to have led this exceptional project. We are convinced that our report will provide a solid platform for establishing a sound Islamic financial industry in the region, providing innovative solutions to the public and the states of the West African union.” – TradeArabia News Service