OIC member countries record $63bn trade deficit for halal economy

Member states of the Organisation of Islamic Cooperation (OIC) recorded a trade deficit of 63 billion dollars for halal economy products covering food, fashion, pharmaceuticals, and cosmetics in 2021, according to the 2022 Annual OIC Halal Economy Report

The News Agency of Nigeria (NAN) reports that halal economy products refer to commodities whose use is not forbidden in Islam.

The report, commissioned by the Islamic Centre for Development of Trade (ICDT) and produced by DinarStandard, a U.S.-based research, and advisory firm, was launched in Istanbul on Nov. 29, 2022 at an event attended by ministers of OIC member countries, and representatives from OIC organs.

According to the report, exports from OIC member states stood at 275 billion dollars while imports totalled 38 billion dollars.

The report further indicated that 18 per cent of the imports were sourced within OIC member states, while only three members of the group – Türkiye, Indonesia, and Malaysia – made it to the top 20 exporters of halal economy products.

“For close to four decades, ICDT has strived to facilitate trade and investments across OIC countries by promoting halal economy products and services, developing partnerships and strategic alliances between stakeholders of member states, helping disseminate information on intra-OIC supply and demand, and fostering best practices.

“With this report, we aim to inspire and empower OIC countries to act cohesively, promote inclusive growth and increase the OIC’s share in the halal trade and investments ecosystem with integrity and purpose”, said Latifa El Bouabdellaoui, Director General of ICDT.

While OIC countries imported products from the food, pharmaceutical, and cosmetics sectors, they were net exporters of apparel and footwear products, and had exported products worth 101.94 billion dollars in 2021.

Imports on the other hand stood at 34.96 billion dollars, resulting in a positive trade balance of 66.98 billion dollars.

Meanwhile, in terms of investments, OIC member states received a total of 180 investments across the eight sectors of the halal economy, with 120 disclosed deals worth 7.9 billion dollars in 2021.

Islamic finance assets in OIC countries were worth 3.32 trillion dollars in 2020 and are forecast to reach 4.82 trillion dollars by 2025, at a CAGR of 7.8 per cent.

In 2021, deals in finance constituted 23 per cent of all transactions in OIC countries.

OIC member countries made up six of the top 10 global markets for Muslim consumer spend on media and recreation in 2021.

Muslim consumers from OIC member countries spent an estimated 141 billion dollars on media and recreation in 2021, and this has been forecast to reach 231 billion dollars by 2026.

Meanwhile, the travel sector, one of the industries most affected by the Coronavirus pandemic saw muslim travelers from OIC countries spending a total of 86 billion dollars in 2021, and this has been forecast to reach 211 billion dollars by 2026.

Islamic higher education considered to be essential to the growth of the halal economy, Muslim consumers from OIC countries spent 15 billion dollars in 2021, with the top three markets being Saudi Arabia, Türkiye, and Indonesia.

This spend is forecast to reach 19 billion dollars by 2026.