Algeria launches Islamic insurance and establishes banks in Africa

Algerian Finance Minister Ayman Bin Abdul Rahman said that Algeria will launch for the first time an Islamic insurance system, known as Takaful, as the government seeks to boost the country's Islamic finance sector.

Bin Abdul Rahman also said that the authorities are planning to establish banks in African countries as part of broader economic reforms in the OPEC member country.

Algeria announced plans to develop and diversify its economy to reduce dependence on oil and gas, after a drop in energy revenues caused financial problems.

Bin Abdul Rahman told Radio Algeria that Islamic insurance will be available in state-owned companies, starting next week.

He added that this step comes on the heels of a move by state banks last month to start offering Islamic financing products in an effort to attract funds from the parallel market.

The government says Shariah-compliant financial services will help find new sources of financing for an economy that is currently heavily dependent on oil and gas export revenues.

The authorities also said they would open the door for the private sector to establish banks as part of banking sector reforms pledged by President Abdelmadjid Tebboune.

Bin Abdul Rahman said that the next steps will include expanding abroad by establishing banks in African countries, especially in the neighboring Niger and Mali countries.