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In Part One of this series we traced Africa’s demographic rise and the philosophical case for Islamic finance as a transformative economic instrument. In this second, and final, part MAHMOOD SANGLAY focuses on confronting inequality, structural constraints, and the limits of the current system.
A second, more challenging conversation emerged at the B20 Islamic Finance Forum. This conversation is concerned with the barriers to execution. If Islamic finance is to shift from niche status to a mainstream driver of development, it must confront structural weaknesses within African markets, global financial systems, and its own institutional architecture.
This is where the second half of the forum offered its sharpest insights, beginning with a moral and political warning.
‘Not a Sandton conversation’
The forum’s most morally charged input came from a senior leader in the South African Democratic Teachers’ Union, Nkosana Dolopi. His remarks challenged the forum to ensure that Islamic finance does not become a technocratic conversation detached from the lived realities of poverty and exclusion in South Africa.
Dolopi’s challenge is a necessary corrective to the forum’s largely institutional focus. Islamic finance, at its ethical core, centres human welfare. Yet financial discourse often drifts toward markets rather than people. By contrasting Sandton’s affluence with Alexandra’s deprivation, Dolopi forces the conversation back to social justice.
His comments sharpen an essential tension: can Islamic finance truly claim moral authority if it does not place inequality, unemployment and the dignity of workers at the centre of its agenda? For Islamic finance to be legitimate in Africa, its champions must present it as an instrument for redistributive development, financial injusctice redress and not merely portfolio diversification.
Why Islamic finance remains 1% of Africa’s assets
Goolam Ballim provides the most candid structural diagnosis of why Islamic finance remains a marginal player in African capital markets.
Ballim’s argument is a sobering reminder that potential does not automatically translate into impact. Regulatory barriers, tax structures, macroprudential norms and the dominance of incumbent conventional banks create an ecosystem in which Islamic instruments struggle to scale.
Moreover, Ballim’s point about trust exposes a deeper structural issue: Islamic finance does not yet command public familiarity. It suffers not from mistrust but from non-recognition. It lacks the ecosystem—from regulation to liquidity—to operate at transformative scale.
Without active efforts to build financial literacy, expand secondary markets and modernise regulatory frameworks, Islamic finance will remain a ‘rounding error’—an expression that encapsulates both its current marginality and its latent possibility.
Innovation exists—but unevenly
If Ballim diagnosed the constraints, asset manager Fatima Vawda offered a countervailing example: South Africa can innovate when motivated. Vawda shows what is possible when innovation, regulation and market appetite align. Her firm’s listing of Africa’s first sustainability-linked sukuk and the first global Shariah-compliant actively managed ETF (exchange-traded funds) demonstrate the practical potential of Islamic finance.
Vawda’s successful issuances rebut the argument that Islamic finance cannot operate at scale in modern markets. Yet her experience also suggests that progress is exception-driven rather than systemic.
South Africa’s regulatory system accommodated these innovations only after years of negotiation. This reveals both a strength and a weakness: Islamic finance can thrive when champions drive reform, but the absence of an enabling ecosystem prevents widespread adoption. The next stage requires systematising innovation rather than relying on isolated successes.
Reflections on gaps and opportunities
While the forum’s intellectual and ideological breadth was impressive, some gaps require frank acknowledgment. Most notable was the absence of concrete commitments and resolutions. Despite taking place alongside the first African G20, the forum ended without a declaration, roadmap or working groups to sustain its momentum.
In the absence of follow-through mechanisms the forum is at risk of becoming ceremonial and symbolic rather than catalytic. This gap may be compounded by an overreliance on voluntary cooperation. Calls for ‘networks’, ‘collaboration’ and ‘partnerships’ carry little institutional weight in the absence of structures for coordination, monitoring and accountability.
The forum must expand engagement with Africa’s political economy. Issues such as corruption, institutional fragility, fiscal instability and governance deficits surfaced indirectly. It is common cause that Africa’s regulatory, institutional, political and economic obstacles cannot be overcome by goodwill alone. Yet these structural risks fundamentally shape the viability of Islamic finance across Africa. A developmental financing model that hinges on trust, accountability and ethical conduct cannot thrive where institutions are weak or policy environments are unpredictable.
An future summit is clearly expanded African continental representation. Although Türkiye and Indonesia contributed meaningfully, key African bodies—the African Union, African Development Bank and Afreximbank—are key voices that must join the conversation on future forums. Their involvement is essential for achieving the scale and coherence required for continental impact.
The forum nevertheless did sketch an embryonic framework that, with political will, could evolve into a continental Islamic finance architecture. Perhaps constituting a structure like a Pan-African Islamic Finance Network is a useful next step. In South Africa this could certainly stimulate deeper engagement with South National Treasury and the DBSA on Islamic-funded infrastructure portfolios, and expanding industrial financing partnerships with the IDC and NEF.
The forum did though recognise the value of G20-level South–South cooperation with Indonesia and Türkiye, the creation of a learning platform to democratise best practice, and the development of a strategic communications agenda to normalise Islamic finance. These steps are ambitious but necessary if Islamic finance is to move from the periphery of Africa’s economies to their centre.
Despite its limitations, the inaugural B20 Islamic Finance Forum offers Africa an ethical, asset-backed and long-term opportunity that is well suited to the continent’s infrastructure, industrialisation and social-development needs.
It may be too early to express disappointment that the forum produced no formal declarations or resolutions, but it is not too early to insist that momentum must translate into mechanisms. If Africa’s demographic century is to become a century of dignity, Islamic finance must demonstrate that it is indispensable.
