The UAE establishes its position as a global center for “Islamic Finance” and “Halal Industry”

The UAE continues to consolidate its position as a leading global center in the fields of Islamic finance and the halal industry, within a comprehensive development vision that supports economic diversification and enhances the country’s competitiveness in global markets, where the assets of Islamic banks constitute about 18% of the total assets of the banking sector, while the state aims to raise the share of halal products exports, from 74 billion dirhams to about 315 billion dirhams in 2031.

The sectors related to Islamic finance and halal products are witnessing a remarkable growth that reflects the UAE’s vision in building a flexible and sustainable economy under continuous government support, the existence of advanced legislative structure, leading financial and industrial centers, based on knowledge, technology and innovation.

Last May, the UAE launched the Islamic Finance and Halal Finance Strategy, which aims to develop an integrated environment for Islamic financing activities, including banking, solidarity, sukuk, and non -banking financial services, according to best global practices and standards.

In the field of Islamic financing, according to the recent central bank data for last February, the assets of Islamic banks constitute about 18% of the total assets of the banking sector, while the share of Islamic banks of total credit of the banking sector in the country is about 22.8%.

The Islamic Sukuk market witnessed a remarkable expansion in the Emirates, and the federal government issued an Islamic treasury in the local currency for the first time in 2023, which constitutes an incentive for other entities in the sector. The state is one of the largest sukuk listing centers in the world.

The total value of the bonds listed in Nasdak Dubai is more than $ 95.7 billion in May, according to the latest data that dealt with this aspect issued in June, which establishes its position one of the major global destinations to include fixed income tools compatible with Islamic law.

The state ranked fourth among the largest Islamic financial markets globally in terms of assets, according to the Islamic Finance Development Index for 2023.

The Director General of the Emirates Banking Federation, Jamal Saleh, stressed that the UAE’s Islamic Finance and Halal Finance strategy have set ambitious goals that would make a qualitative shift in the contribution and presence of the Islamic economy at the local, regional and international levels.

He said in statements to the Emirates News Agency, “WAM”, that “the UAE has developed over the past years, financial and economic systems, which strengthened the role of the Islamic financial sector in the strategy of economic diversification pursued by the state,” noting that the “Islamic banking” in all its aspects witnessed clear developments, whether at the level of sukuk issues and their inclusion or at the level of the Islamic banking sector or others.

At the level of the banking sector, the Director General of the Emirates Banking Union stressed that Islamic banks in the United Arab Emirates record high growth rates, which reflects the increase in confidence in the national economy as a whole and the banking model that is compatible with the Sharia.

Saleh pointed to the performance of Islamic banks in the latest statistics issued by the Central Bank for the month of February this year, which showed an increase in the total credit granted by Islamic banks to 503.5 billion dirhams, with an annual growth of 16%, pointing to the role of Islamic banks in promoting the national economy.

He noted that the volume of credit addressed to the private sector from Islamic banks reached 350.4 billion dirhams at the end of February, with an annual growth of 13.2%, pointing to the deposits of Islamic banks that achieved clear leaps, as they reached 595.3 billion dirhams, with an annual growth of 16.9%

In parallel to the development of Islamic finance, the UAE stands out as a global platform for the halal industry, driven by a national vision aimed at raising the state’s share of halal products from 74 billion dirhams to about 315 billion dirhams in 2031 during the coming years, according to the last strategy approved in this field.

In this context, the Chairman of the Board of Directors of the Group of Food and Beverage Folders in the Emirates, Saleh Lootah, told “WAM” that “the national strategy for Islamic finance and halal industry represents a milestone towards consolidating the UAE’s position as a global center for the manufacture of halal products.”

He added that the national industry has made a great way in developing food products, as it is currently witnessing an increasing interest from local manufacturers by expanding this vital sector, especially in light of the accelerated growth in global demand for halal products, which constitutes a major economic opportunity.

Lootah considered that reaching the goal can be based on three basic factors that include innovation and increased investment in research and development to provide innovative halal products that compete globally, align with the nature of global demand, financing and promotional support.

According to the “Yonafide Research” report on the halal food and beverage market in the Emirates, it is expected that the size of the halal food and beverage market in the country will exceed $ 31.27 billion by 2029, driven by the strategic location of the Emirates a global commercial and tourism center that enhances its attractiveness, and attracts local and international consumers looking for halal certificates.