In a country where over 95% of the population is Muslim, Islamic finance appears, on paper, as a natural lever for financial diversification. Founded on the prohibition of interest and the principle of risk sharing, it relies on contracts backed by real assets and productive activities. It thus differs from conventional credit through a partnership approach rather than simply fixed-rate loans.

Senegal officially led the way in 2014 with the issuance of a 100 billion CFA franc sovereign sukuk on the regional market. Since then, several issuances have followed, including a 330 billion CFA franc issuance in 2022, structured according to Islamic finance principles. These operations have met with significant demand, particularly from institutional investors and subscribers from Gulf countries. They have demonstrated a real appetite for this type of instrument.

At the banking level, the Central Bank of West African States (BCEAO) has, for several years, incorporated specific provisions governing Islamic products within the WAEMU zone. Dedicated institutions or Islamic windows within conventional banks now offer murabaha contracts for equipment financing, ijara contracts for lease-purchase agreements, and musharaka contracts for partnership projects.

Despite these advances, the share of Islamic finance in the Senegalese banking system remains modest. Sharia-compliant assets represent a limited fraction of total national banking assets. Several factors explain this slow growth.

First, the regulatory environment, while existing, remains improvable. The standardization of contracts, specific oversight, and the training of regulators require ongoing development. Second, taxation can create distortions. Some Islamic products involve successive transfers of ownership, which could lead to double taxation if the legislation does not provide appropriate provisions.

The challenge is also cultural and technical. Structuring an Islamic product requires specific legal and financial expertise, which is still not widespread locally. Banks must train their teams, establish religious compliance committees, and adapt their IT systems. These initial investments are slowing the segment's expansion.

However, the issue goes beyond mere religious compliance. Islamic finance can attract savings that currently remain outside the banking system due to a reluctance towards interest-bearing loans. In a context where the rate of financial service utilization in the WAEMU is around 45%, according to BCEAO data, any additional source of banking access represents an asset for mobilizing domestic resources.

It can also contribute to financing infrastructure and major projects. Sukuk, backed by tangible assets, offer an alternative to conventional bonds. They can attract investors from the Middle East or Southeast Asia seeking investments that comply with Islamic principles. For a country engaged in ambitious investment programs, this diversification reduces dependence on a single type of financing.

However, caution is advised. Islamic finance is not an automatic solution to budgetary constraints or insufficient credit for SMEs. It is subject to the same solvency, profitability, and risk management requirements as conventional finance. A project that is not very viable does not become sustainable simply because it is structured without interest.

The real potential lies in the coherent integration of these instruments into the national financial ecosystem. This requires careful tax adjustments, enhanced training for professionals, improved public awareness, and more in-depth local structuring of the products. Under these conditions, Islamic finance could become a strategic complement, capable of broadening the investor base and strengthening the depth of the Senegalese financial market.

Today, it represents a real opportunity, but one that is still incompletely exploited. Its future will depend less on theoretical principles than on the institutional and technical capacity to make it a fully operational tool serving the national economy.