ISLAMIC ECONOMY

Nigeria and Saudi Arabia Sign Agreement to Boost Halal Economy

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4 weeks ago

March 20, 2025

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Aamer Yaqub

Picture this: a $7.7 trillion global opportunity, and Nigeria just took a giant leap forward. Forget dry trade talk – we’re diving into the groundbreaking Halal Economy Deal between Nigeria and Saudi Arabia, a move that’s shaking up the entire market. Think massive investments, job creation, and a potential economic transformation for Nigeria. But what’s the real story? How does this impact your business, your community, or your understanding of the global Halal market? We’re going to break down this landmark partnership, revealing how it’s positioning Nigeria as a major player in this rapidly expanding sector and what it means for everyone involved.

The signing ceremony, held at the prestigious Makkah Halal Forum in Saudi Arabia, served as a testament to the profound significance of this collaborative endeavor. Vice President Kashim Shettima, represented by Deputy Chief of Staff to the President, Senator Ibrahim Hadejia, articulated Nigeria’s ambitious vision of leveraging this partnership as a “game-changing opportunity” to propel the nation’s economic trajectory. This agreement, forged with HPDC, a subsidiary of Saudi Arabia’s Public Investment Fund, and represented by its CEO, Fahad Alnuhait, aims to foster investment, facilitate technical cooperation, and expand market access across pivotal sectors, including food production, pharmaceuticals, finance, and livestock.

Delving into the Scope of the Halal Economy Deal

The Halal Economy Deal extends beyond the confines of a standard bilateral trade agreement. It embodies a comprehensive and multifaceted strategy to seamlessly integrate Nigeria into the intricate fabric of the global halal supply chain. As the global halal market continues its trajectory of unprecedented growth, this agreement strategically positions Nigeria to capture a significant share of this burgeoning market. Recent analyses from industry experts consistently highlight the sector’s robust year-on-year expansion, driven by escalating consumer demand and an ever-widening market reach.

Key Components of the Agreement

Technical Cooperation: This agreement lays the groundwork for substantial investment in Nigeria’s halal infrastructure, encompassing state-of-the-art processing facilities, accredited certification bodies, and efficient logistics networks. Technical cooperation will center on the strategic transfer of knowledge, comprehensive capacity-building initiatives, and the seamless adoption of globally recognized halal standards.
Enhanced Market Access: The partnership will unlock unprecedented avenues for Nigerian halal products to penetrate the Saudi Arabian market and the broader Gulf Cooperation Council (GCC) region. This will involve streamlining export procedures, facilitating participation in international trade fairs, and strategically promoting Nigerian halal brands on a global stage.

Strategic Sector Diversification: The Halal Economy Deal strategically targets key sectors with significant growth potential:

1. Food Production: Nigeria’s robust agricultural sector, endowed with abundant natural resources, is poised to emerge as a major supplier of high-quality halal food products to international markets.
2. Pharmaceuticals: The agreement will stimulate the development of halal-compliant pharmaceuticals and cosmetics, catering to the growing demand for ethical and sustainable products.
3. Finance: Building upon Nigeria’s burgeoning Islamic finance sector, the partnership will expand access to a diverse range of halal financial products and services, fostering economic growth and stability.
4. Livestock: Nigeria’s livestock industry will benefit from enhanced breeding programs, cutting-edge processing facilities, and expanded export opportunities, contributing to food security and economic prosperity.

Strengthening the Regulatory Framework: The invaluable support from the Islamic Development Bank (IsDB) and the Arab Bank for Economic Development in Africa (BADEA) will play a crucial role in fortifying Nigeria’s halal regulatory framework, ensuring seamless compliance with stringent international standards.

Special Assistant to the President on Export Promotion, Aliyu Sheriff, emphasized the pivotal role of Islamic finance in driving this transformative initiative. Nigeria’s demonstrated success in issuing Sukuk bonds for vital infrastructure financing and the establishment of reputable Islamic banks such as Jaiz Bank, Taj Bank, and Lotus Bank underscore the nation’s unwavering commitment to this dynamic sector. These innovative financial instruments will serve as catalysts for funding halal-related projects and attracting substantial foreign investment.

Expanding the Halal Market Beyond Traditional Boundaries

It is imperative to recognize that the halal economy transcends the traditional boundaries of Muslim consumers. Non-Muslim majority countries such as Brazil, Australia, and Thailand have successfully capitalized on this sector, achieving substantial export growth. This underscores the universal appeal of halal products, which are often associated with exceptional quality, stringent safety standards, and ethical production practices.

Vice President Shettima articulated the profound potential economic impact of this strategic partnership, stating that increasing Nigeria’s halal exports to OIC markets from a mere two percent to a targeted six percent could inject a substantial $540 million into the nation’s GDP. Furthermore, strategic import substitution initiatives are projected to add nearly $1 billion by 2027. This Halal Economy Deal is poised to generate thousands of new employment opportunities across a wide spectrum of sectors, contributing significantly to Nigeria’s economic diversification and sustainable development.

The Collective Contribution of Key Stakeholders

The Nigerian delegation comprised a diverse and highly skilled group of stakeholders representing key government agencies, prominent financial institutions, and influential business organizations. This collaborative and inclusive approach underscores the unwavering commitment to ensuring the resounding success of this transformative initiative.

The Standard Organisation of Nigeria (SON) will play a pivotal role in ensuring the rigorous certification and compliance of halal products.
The Nigeria Export Promotion Council (NEPC) will facilitate the strategic promotion of exports and expand market access for Nigerian halal products.
The Bank of Industry (BOI) will provide essential financing and support to empower halal-related businesses.
The Nigeria-Saudi Chamber of Commerce will serve as a vital bridge, fostering mutually beneficial connections between businesses in both nations.

The Halal Economy Deal represents a watershed moment in Nigeria’s journey towards economic development. By strategically leveraging its abundant natural resources, forging robust strategic partnerships, and nurturing its burgeoning Islamic finance sector, Nigeria is poised to emerge as a dominant force in the global halal market. This transformative agreement will not only propel economic growth but also create a wealth of opportunities for sustainable development and social inclusion, ensuring a prosperous future for generations to come.

Navigating the Regulatory Landscape

A critical component of the Halal Economy Deal lies in the establishment and enforcement of robust regulatory frameworks. This ensures the integrity and authenticity of halal products, fostering consumer trust and confidence. The Standard Organisation of Nigeria (SON) will play a pivotal role in this endeavor, working closely with international halal certification bodies to develop and implement standardized procedures.

Certification Standards: The development of clear and consistent halal certification standards is essential for ensuring product quality and compliance. This involves rigorous inspections, audits, and testing procedures.
Traceability and Transparency: Implementing effective traceability systems will enable consumers to track the origin and processing of halal products, enhancing transparency and accountability.
Capacity Building: Investing in capacity-building programs for halal auditors and inspectors will strengthen the regulatory framework and ensure its effectiveness.

Empowering Small and Medium-Sized Enterprises (SMEs)

SMEs play a vital role in Nigeria’s economy. The Halal Economy Deal provides a unique opportunity to empower SMEs in the halal sector, creating jobs and stimulating economic growth.

Access to Finance: Providing SMEs with access to affordable financing options, such as Islamic microfinance and venture capital, will enable them to expand their operations and invest in new technologies.
Technical Assistance: Offering technical assistance and training programs will equip SMEs with the skills and knowledge needed to meet international halal standards.
Market Linkages: Facilitating market linkages between SMEs and buyers in Saudi Arabia and other GCC countries will expand their market reach and increase their export potential.

The Socio-Economic Impact

The Halal Economy Deal is not solely focused on economic growth; it also aims to address critical socio-economic challenges.

Job Creation: The agreement is expected to create thousands of jobs across various sectors, particularly in rural areas where poverty rates are high.
Poverty Reduction: By creating new economic opportunities, the deal will contribute to poverty reduction and improve the living standards of Nigerians.
Rural Development: The focus on agricultural and livestock sectors will stimulate rural development, creating opportunities for farmers and rural communities.
Food Security: Enhancing food production and processing capabilities will contribute to food security and reduce reliance on food imports.

Building Sustainable Partnerships

The success of the Halal Economy Deal depends on building strong and sustainable partnerships between Nigeria and Saudi Arabia.

Government-to-Government Collaboration: Continued collaboration between government agencies in both countries is essential for implementing the agreement and addressing any challenges that may arise.
Business-to-Business Partnerships: Encouraging business-to-business partnerships will foster innovation, knowledge sharing, and technology transfer.
People-to-People Exchanges: Promoting cultural exchanges and people-to-people interactions will strengthen the bonds between the two countries.

Addressing Potential Challenges

Like any major economic initiative, the Halal Economy Deal may face potential challenges and risks.

Infrastructure Deficiencies: Addressing infrastructure deficiencies, such as inadequate transportation and logistics networks, is crucial for facilitating trade and investment.
Regulatory Hurdles: Streamlining regulatory procedures and reducing bureaucratic red tape will enhance the ease of doing business.
Market Access Barriers: Overcoming market access barriers, such as tariffs and non-tariff barriers, will ensure that Nigerian halal products can compete effectively in international markets.
Maintaining Halal Integrity: Ensuring the integrity and authenticity of halal products is essential for maintaining consumer trust and confidence.

This Halal Economy Deal is more than an agreement; it charts Nigeria’s course to becoming a key player in Africa’s Halal market. We’ve seen how strategic alliances, particularly with Saudi Arabia, combined with Nigeria’s rich natural resources and burgeoning Islamic finance sector, are vital to unlocking this potential. The anticipated benefits include significant job creation, a substantial boost to the national economy, and an enhanced global presence.

By focusing on critical infrastructure development, creating streamlined regulatory frameworks, and providing robust support for Small and Medium Enterprises, Nigeria is laying a solid foundation for sustainable growth within the Halal economy. This collaboration stands as a powerful example of how international cooperation can drive tangible change, fostering a more prosperous and sustainable Halal market for all involved. It signifies a commitment to building a better future that extends beyond mere trade transactions.

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ISLAMIC ECONOMY

IsDB and Algeria Enhance Strategic Partnership

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3 days ago

April 15, 2025

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Aamer Yaqub

Ever wonder how global finance shapes the future of nations? Well, this past weekend in Algiers, something really interesting happened that could have big implications for Algeria and beyond! Imagine the top financial minds from the Islamic Development Bank (IsDB) meeting with Algeria’s finance minister – it wasn’t just a routine handshake. These talks, held right in the heart of Algiers, signaled a powerful move to boost their already strong partnership. We’re talking about a deeper dive into how this major financial institution and this key North African country are teaming up. Stick with us as we unpack what this could mean for economic growth, development, and even the everyday lives of people in the region.

New Partnership Framework Takes Center Stage in IsDB-Algeria Talks

The central focus of these constructive talks revolved around the unveiling of a new, comprehensive partnership framework. This ambitious framework is slated for official announcement during the much-anticipated IsDB Group Annual Meetings, a prestigious event scheduled to unfold in Algiers this coming May. The selection of Algeria as the host nation for these annual meetings further underscores the strengthening ties and mutual respect that characterize the relationship between IsDB and Algeria.

This forthcoming partnership framework is strategically designed to inject dynamism into key sectors that are vital for Algeria’s long-term prosperity. The emphasis is squarely on fostering competitiveness across various industries, actively promoting economic diversification to reduce reliance on traditional sectors, and creating a fertile ground for private sector development to flourish. Recognizing the importance of human capital, the framework also prioritizes enhanced partnerships aimed at nurturing skills, education, and overall human development within Algeria. Furthermore, the agreement seeks to leverage the collective strengths of IsDB and Algeria to bolster regional cooperation, fostering greater economic integration and shared prosperity across the wider region.

Beyond the overarching framework, the discussions also delved into the crucial matter of resuming and expanding cooperation in the financing of strategic projects. These projects are envisioned as key drivers in Algeria’s pursuit of the Sustainable Development Goals (SDGs) and in its ongoing efforts to modernize and strengthen its national infrastructure. The commitment from both IsDB and Algeria to these initiatives highlights a shared vision for a more prosperous and sustainable future for the Algerian people.

Railway Expansion: A Key Focus for IsDB and Algeria’s Collaborative Future

A particular area of emphasis during the talks was the critical role of expanding railway infrastructure as a catalyst for multifaceted progress. Both sides unequivocally underscored the potential of a modern and efficient railway network to drive sustainable economic growth by facilitating trade, connecting markets, and reducing transportation costs. Moreover, improved railway infrastructure is seen as a vital element in enhancing the quality of life for Algerian citizens by providing efficient and affordable transportation options. Environmentally, the expansion of rail networks offers a greener alternative to road transport, contributing to a reduction in carbon emissions and a smaller environmental footprint. Finally, enhanced railway connectivity is recognized as a powerful tool for fostering regional integration, both within Algeria and with neighboring countries, promoting greater social and economic cohesion.

Dr. Al Jasser, the President of the IsDB Group, reaffirmed the Bank’s unwavering commitment to supporting these transformative projects. He emphasized the IsDB’s extensive and successful track record in financing similar infrastructure initiatives across its diverse member countries, assuring Algeria of the Bank’s expertise and dedication. This commitment from the IsDB provides a significant boost to Algeria’s ambitious infrastructure development plans.

Furthermore, Dr. Al Jasser warmly commended the Algerian government for its proactive and sustained efforts in strengthening its engagement with the IsDB Group. He also expressed his sincere gratitude to Algeria for its generous offer to host the upcoming IsDB Group Annual Meetings and for its ongoing support in ensuring the resounding success of this important international gathering. This expression of appreciation underscores the mutual respect and collaborative spirit that underpin the deepening relationship between IsDB and Algeria.

A Relationship Built on Mutual Goals:

The partnership between IsDB and Algeria is not a recent development; it is a relationship built on years of shared objectives and a mutual commitment to fostering sustainable socio-economic development. Algeria has been a steadfast member of the IsDB since its inception in 1974, actively participating in the Bank’s various initiatives and benefiting from its diverse range of financing and technical assistance programs.

Over the years, the IsDB has played a significant role in supporting Algeria’s development agenda across a multitude of sectors. This includes financing crucial infrastructure projects in areas such as energy, transportation, water and sanitation, and urban development. The Bank has also supported Algeria’s efforts in promoting agricultural development, enhancing healthcare and education systems, and fostering the growth of small and medium-sized enterprises (SMEs).

The IsDB: A Key Player in Global Development

Established in 1975, the Islamic Development Bank (IsDB) Group is a multilateral development finance institution focused on empowering its 57 member countries, primarily Muslim-majority nations, to achieve socio-economic progress. Guided by the principles of Islamic finance, the IsDB provides a wide array of financial products and services, including loans, grants, equity investments, and trade finance. Beyond financial assistance, the Bank also offers technical expertise and capacity-building support to its member countries.

The IsDB’s strategic priorities are closely aligned with the Sustainable Development Goals (SDGs). The Bank actively supports projects and programs that aim to eradicate poverty, promote inclusive and sustainable economic growth, improve health and education, and address climate change. Its commitment to fostering South-South cooperation and knowledge sharing among its member countries further enhances its impact on global development. As of early 2025, the IsDB Group’s total financing approvals have exceeded $170 billion, demonstrating its significant contribution to development initiatives across the Muslim world and beyond.

Algeria’s Strategic Importance in the Region:

Algeria, with its significant geographical size, substantial natural resources, and growing economy, holds a strategically important position in North Africa and the wider Mediterranean region. The country is actively pursuing economic diversification to reduce its reliance on hydrocarbons and is implementing reforms to attract foreign investment and promote private sector growth.

Algeria’s commitment to sustainable development is evident in its national development plans, which prioritize investments in renewable energy, infrastructure modernization, and human capital development. The country plays a key role in regional stability and is actively engaged in promoting cooperation and dialogue among its neighbors. Its rich cultural heritage and vibrant society further contribute to its significance on the global stage.

The New Partnership Framework: Pillars of Cooperation:

The new partnership framework between IsDB and Algeria, set to be unveiled in May, is expected to be built upon several key pillars of cooperation, reflecting the evolving needs and priorities of Algeria and the strategic objectives of the IsDB.

Boosting Competitiveness: This pillar will likely focus on supporting Algeria’s efforts to enhance the competitiveness of its industries beyond the energy sector. This could involve financing projects that promote innovation, technological upgrades, and the development of new value chains in sectors such as manufacturing, agriculture, and tourism. The IsDB and Algeria will likely collaborate on attracting foreign direct investment and fostering an enabling environment for businesses to thrive.
Fostering Private Sector Development: Recognizing the crucial role of the private sector in driving economic growth and creating employment opportunities, this pillar will aim to support the development of a dynamic and resilient private sector in Algeria. This could involve providing financing and technical assistance to SMEs, promoting entrepreneurship, and supporting the development of capital markets. The IsDB and Algeria may also explore initiatives to improve the business environment and reduce regulatory hurdles.
Enhancing Human Capital Development: Investing in people is fundamental to long-term sustainable development. This pillar will likely focus on strengthening Algeria’s education and training systems, improving healthcare infrastructure, and promoting skills development to meet the demands of a modern economy. The IsDB and Algeria may collaborate on projects that enhance access to quality education, improve healthcare outcomes, and empower youth and women. Recent data from UNESCO indicates that Algeria has made significant strides in improving literacy rates, reaching over 80% in recent years, but continued investment in quality education and skills training remains a priority.
Strengthening Regional Cooperation: Given Algeria’s strategic location and its commitment to regional stability, this pillar will aim to leverage the partnership with the IsDB to promote greater economic integration and cooperation across the region. This could involve supporting cross-border infrastructure projects, facilitating trade and investment flows, and promoting knowledge sharing and best practices among member countries. The IsDB and Algeria may also collaborate on initiatives that address shared challenges such as food security and climate change.

The Strategic Importance of Railway Infrastructure

The emphasis on expanding railway infrastructure during the recent discussions highlights its multifaceted benefits for Algeria’s development. Modern and efficient rail networks are increasingly recognized globally as vital arteries for economic growth and social progress.

Economic Growth: Improved railway infrastructure facilitates the efficient movement of goods and people, reducing transportation costs and enhancing the competitiveness of businesses. It connects production centers with markets, both domestic and international, fostering trade and economic activity. Studies by the World Bank have consistently shown a strong correlation between investment in transport infrastructure and GDP growth.
Quality of Life: Modern railways provide safe, reliable, and affordable transportation options for citizens, improving connectivity between urban and rural areas and enhancing access to employment, education, and healthcare services. This can significantly improve the overall quality of life and reduce social disparities.
Environmental Sustainability: Rail transport is generally more energy-efficient and produces significantly lower carbon emissions per passenger-kilometer or tonne-kilometer compared to road or air transport. Investing in railway infrastructure aligns with Algeria’s commitment to sustainable development and its efforts to mitigate climate change.
Regional Integration: Enhanced railway links can foster greater connectivity and trade between Algeria and its neighboring countries, promoting regional economic integration and strengthening political ties. This is particularly important in North Africa, where greater cooperation can unlock significant economic potential.

IsDB’s Expertise in Infrastructure Development

Dr. Al Jasser’s reaffirmation of the IsDB’s commitment to supporting Algeria’s railway ambitions is backed by the Bank’s extensive experience in financing and providing technical assistance for similar projects across its member countries. The IsDB has a proven track record of supporting the development of large-scale infrastructure projects, including railways, ports, airports, and energy networks.

The Bank’s approach to infrastructure financing goes beyond simply providing funds. It also involves providing technical expertise in project planning, design, implementation, and management. The IsDB often facilitates knowledge sharing and the adoption of best practices from other successful projects in its member countries, ensuring that Algeria can benefit from global experience in railway development.

Hosting the IsDB Annual Meetings: A Symbol of Trust and Cooperation

Algeria’s hosting of the upcoming IsDB Group Annual Meetings in May is a significant event that underscores the strong and growing partnership between IsDB and Algeria. These annual meetings bring together high-level representatives from the IsDB’s 57 member countries, as well as leading figures from the global financial and development community.

Hosting such a prestigious event provides Algeria with a unique platform to showcase its economic progress, investment opportunities, and its commitment to sustainable development. It also offers an invaluable opportunity for Algerian officials and business leaders to engage directly with their counterparts from across the Muslim world, fostering new partnerships and strengthening existing relationships.

The fact that the IsDB has chosen Algiers as the venue for its annual gathering is a testament to the Bank’s confidence in Algeria’s leadership and its recognition of the country’s growing importance within the IsDB community. It also reflects the positive trajectory of the relationship between IsDB and Algeria and the mutual trust that underpins their cooperation.

A Promising Future for IsDB and Algeria

The recent high-level discussions between Minister Bouzred and President Al Jasser, coupled with the upcoming IsDB Group Annual Meetings in Algiers, signal a new chapter in the enduring partnership between IsDB and Algeria. The commitment to a new, comprehensive partnership framework focused on boosting competitiveness, fostering private sector development, enhancing human capital, and strengthening regional cooperation holds immense promise for Algeria’s future socio-economic development.

The strengthened partnership between IsDB and Algeria, spotlighted by talks on a new framework and railway expansion, aims for sustainable development. This collaboration seeks to boost Algeria’s economic competitiveness, diversify its industries, and empower its private sector. Investing in railway infrastructure is key for economic growth, improved living standards, environmental benefits, and stronger regional ties. The IsDB’s expertise, combined with Algeria’s commitment, promises significant benefits. This alliance showcases the power of international cooperation for progress. Watch for updates from the IsDB Annual Meetings in Algiers.

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ISLAMIC ECONOMY

The New Trade War: A Tectonic Shift in the Global Economic Order

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7 days ago

April 11, 2025

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Baba Yunus Muhammad

The recent escalation in trade hostilities between the United States and China marks more than a simple dispute over tariffs. It represents a fundamental realignment of global economic relations. The Islamic world—stretching from Southeast Asia to West Africa—must now confront the reality of a fracturing global economy and seize the opportunity to forge a more sovereign, values-based path.

On April 9, former U.S. President Donald Trump intensified tensions by announcing a dramatic increase in tariffs on Chinese goods, raising duties to 125% and threatening to cut off all negotiations if Beijing responds in kind. China, for its part, has vowed retaliation, raising tariffs to 70% on American imports and signaling a shift toward economic self-sufficiency.

This mutual escalation is not merely a continuation of earlier trade disputes—it is a declaration of economic war. The global economy is now entering an era where the assumptions of interdependence, free trade, and economic globalization no longer hold. Instead, we are witnessing the emergence of competing economic spheres, driven not just by market considerations but by geopolitical strategy and national identity.

The Unraveling of Globalization

The decoupling of the U.S. and Chinese economies has been years in the making. What began as negotiations over trade imbalances and intellectual property rights has grown into a broader ideological contest. Trump’s latest tariffs were framed not as a bargaining tool but as a matter of national defense and political positioning. In Beijing, the message is equally firm: China will not bend under pressure and is prepared for a protracted confrontation.

For the rest of the world, the consequences will be profound. Supply chains will be disrupted. Commodity prices will fluctuate. Investment flows will shrink or shift. Economies deeply reliant on exports or external financing will be particularly vulnerable.

Among these, many Muslim-majority countries find themselves caught in a precarious position. While benefiting from globalization’s promise of open markets and foreign capital, they have remained largely dependent on industrial powers—either Western or Chinese—for critical imports, investment, and technology.

The Islamic World’s Strategic Dilemma

This new trade war should serve as a wake-up call. For too long, Islamic countries have been passive participants in global economic dynamics, rather than architects of their own collective future. The current rupture in global trade offers an unprecedented opportunity to pivot—to rethink priorities, assert sovereignty, and develop resilient, ethical economies grounded in Islamic principles.

First, there is a clear need to strengthen intra-Islamic trade. Despite the presence of the Organisation of Islamic Cooperation (OIC), trade between member states remains far below potential. Structural barriers—ranging from tariff and non-tariff restrictions to poor logistics infrastructure—continue to prevent the emergence of a unified Islamic economic bloc. Efforts must be redoubled to create integrated halal supply chains, harmonized certification systems, and shared development banks.

Second, Islamic finance must play a central role. With assets exceeding $3 trillion, Islamic finance offers a model of ethical, risk-sharing financial systems that emphasize real economic activity, discourage speculative bubbles, and prohibit exploitative interest. In times of global uncertainty, these principles provide a stabilizing foundation for long-term development.

Third, there must be a shift from consumption to production. Many Muslim economies have prioritized raw commodity exports and consumer-driven growth, while neglecting industrialization, technological innovation, and higher education. A coordinated push to invest in science, research, and digital infrastructure—perhaps modeled on joint initiatives between Malaysia, Indonesia, Turkey, and Nigeria—could position the Islamic world as a center for knowledge and creativity in the post-globalization era.

Fourth, the global halal economy represents a major growth frontier. Valued at over $3 trillion across food, cosmetics, pharmaceuticals, and fashion, the halal market is projected to grow significantly. Yet Islamic countries remain underrepresented in its global value chain. Greater cooperation is needed to turn the halal economy into a true engine of industrial development and global trade.

A Call to Leadership and Unity

The stakes are high. As the U.S. and China descend further into economic confrontation, nations across the Global South will be forced to choose sides—or suffer the collateral damage. But the Islamic world need not be a passive victim. With strategic foresight, solidarity, and commitment to its foundational values, it can chart a course that avoids entanglement in great power rivalries while advancing the welfare of its people.

This moment calls for new forms of leadership—visionary leaders who can convene regional economic summits, establish shared development funds, and articulate a coherent strategy for economic self-determination. The time has come for the Islamic world to recognize its collective power—not merely as a bloc of consumers or resource suppliers, but as a civilization with a distinct economic philosophy and global relevance.

In this unfolding global realignment, passivity is not an option. The trade war is real. The consequences are serious. But so too is the opportunity—to build an Islamic economic renaissance rooted in justice, resilience, and strategic independence.

Baba Yunus Muhammad is President of the Africa Islamic Economic Forum, Ghana. He is a researcher and strategic advisor on Islamic economics and geopolitical affairs.

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ISLAMIC ECONOMY

What Will Be the Impact of U.S. Tariffs on the Global Halal Industry?

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2 weeks ago

April 2, 2025

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Hafiz M. Ahmed

Picture this: You’re standing in a bustling market in Jakarta, the air thick with the scent of sizzling satay and the chatter of vendors haggling over prices. A woman next to you picks up a pack of halal beef jerky, imported from the United States, and smiles as she hands over her rupiah. Now imagine that same pack suddenly costs 25 percent more—or disappears from the shelf entirely. That’s the ripple effect of U.S. tariffs, a policy shift that’s sending shockwaves through the global halal industry. As someone who’s spent over two decades chronicling the rise of halal markets—from the slaughterhouses of Iowa to the spice bazaars of Dubai—I can tell you this isn’t just about numbers on a trade ledger. It’s about livelihoods, faith, and the food on millions of tables. With President Donald Trump’s latest tariffs hitting Canada, Mexico, and China in early 2025, and more threatened for April, the halal world is bracing for a storm. So, what does this mean for the $2 trillion industry that feeds a quarter of the planet? Let’s dig in.

The halal industry isn’t some niche corner of the global economy—it’s a powerhouse. Halal, meaning “permissible” in Arabic, governs what 1.9 billion Muslims can eat, wear, and use, according to Islamic law. It’s a system rooted in ethics: animals must be treated humanely, slaughtered with a swift cut while invoking God’s name, and free of anything forbidden, like pork or alcohol. Over my 20-plus years in this field, I’ve watched the halal food market alone balloon from a modest trade into a projected $4.6 trillion giant by 2030, driven by a young, growing Muslim population and even non-Muslims drawn to its promise of quality and cleanliness. The U.S. plays a big role here, exporting halal-certified beef, poultry, and grains to places like Indonesia, Malaysia, and the Gulf states. But now, with tariffs slapping a 25 percent tax on goods from Canada and Mexico, a 10 percent hike on Chinese imports, and whispers of broader “reciprocal” duties looming, the stakes are sky-high.

Let’s start with the basics. Tariffs are taxes the government puts on stuff coming into the country—or, in this case, going out. Trump’s latest moves, rolled out in February 2025, hit Canada and Mexico with a 25 percent tariff and China with an extra 10 percent, citing everything from border security to boosting American jobs. He’s also hinted at a big “liberation day” on April 2, where he might tax every country based on what they charge U.S. goods. The idea? Make foreign products pricier so people buy American instead. It sounds simple, but the halal industry isn’t built on simple. It’s a web of global supply chains—cows raised in Texas, processed in Canada, shipped to Saudi Arabia. Mess with one thread, and the whole thing wobbles.

Take the U.S. beef industry, a halal heavyweight. America’s the world’s second-biggest beef exporter, sending $8 billion worth overseas each year, a chunk of it halal-certified for Muslim markets. I’ve walked the kill floors of plants in Nebraska, where workers in white coats recite “Bismillah” before each cut, ensuring every steak meets Islamic standards. A lot of that beef heads to Canada for processing—think grinding into halal burgers or slicing for shawarma—before crossing oceans. Now, with a 25 percent tariff on Canadian goods coming back into the U.S. or heading elsewhere, costs are spiking. Canadian processors might pass that onto buyers in places like the United Arab Emirates, where a family’s weekly grocery bill could jump. Or they might just say, “Forget it,” and source from Brazil instead, leaving U.S. ranchers high and dry.

Then there’s Mexico, a rising star in halal poultry. Over the years, I’ve seen Mexican firms like Bachoco ramp up halal chicken production, tapping into the U.S.’s neighborly trade perks under the old NAFTA deal. They’d ship birds north for American Muslims or south to Latin America’s growing Muslim communities. That 25 percent tariff changes the math. A halal chicken breast that cost $2 might now hit $2.50, and that’s if Mexico doesn’t retaliate with its own taxes on U.S. goods—which it’s already mulling. I’ve talked to exporters in Guadalajara who say they’re scrambling to find new markets, but it’s not easy. Halal certification takes time, and not every country’s ready to pick up the slack.

China’s a different beast. The 10 percent tariff sounds lighter, but it piles onto existing duties from Trump’s first term. China’s not a halal giant—it’s more about ingredients like soy for animal feed or packaging for halal snacks. I’ve visited factories in Shandong where soybeans get crushed into meal that feeds U.S. cattle, later certified halal. That extra 10 percent could nudge up feed prices here, trickling down to your halal burger at The Halal Guys. China might shrug it off—they’ve got other buyers like Europe—but it’s one more kink in a system that thrives on smooth flow.

So, who feels the pinch? First, American farmers and processors. The U.S. halal export market employs thousands—ranchers in Texas, packers in Iowa, certifiers in New Jersey. I’ve met guys like Ahmed, a halal slaughter supervisor in Kansas, who told me his plant ships 500 tons of beef a month to Malaysia. If tariffs make that too pricey, orders drop, jobs vanish. The American Halal Council, which I’ve worked with for years, estimates the U.S. exports $5 billion in halal goods annually. A trade war could slice that in half, hitting rural towns hardest.

Overseas, Muslim consumers take a hit. In Indonesia, the world’s biggest Muslim country, halal imports from the U.S. are a lifeline—think cereals for breakfast or chicken nuggets for kids. I’ve sat with families in Jakarta who rely on affordable American brands. If prices climb 20 or 30 percent, they’ll switch to local options or competitors like Australia, which isn’t facing U.S. tariffs yet. That’s a win for Aussie farmers, sure, but it’s a loss for U.S. influence in a key market. And in the Gulf, where oil-rich shoppers love American beef, they might just turn to New Zealand instead.

The ripple doesn’t stop there. Halal isn’t just food—it’s trust. Certification bodies, like the Islamic Food and Nutrition Council of America, spend years building standards that brands lean on. I’ve watched auditors pore over supply chains, ensuring every step’s halal. Tariffs mess with that. If a U.S. supplier swaps Canadian processing for, say, Thailand to dodge costs, certifiers have to recheck everything. That takes time and money, and if they miss a beat, consumers lose faith. I’ve seen scandals—like pork-tainted halal labels in Europe—tank entire markets. Uncertainty from tariffs could spark similar chaos.

Now, let’s talk winners. Brazil’s licking its chops. I’ve toured their massive halal plants in São Paulo, where they’ve mastered the art of cheap, compliant meat. They’re already the top halal exporter, shipping $15 billion a year to the Middle East and Asia. If U.S. goods get pricier, Brazil’s ready to flood the gap. Australia’s in the game too, with its grass-fed lamb and beef, a favorite in places like Qatar. I’ve tasted their halal chops in Sydney—juicy, affordable, and tariff-free for now. These countries could snatch market share while the U.S. scrambles.

But it’s not all doom for America. Some say tariffs could force halal production stateside. Trump’s pitch is that higher costs on foreign goods will make companies build here. I’ve heard that before—in 2018, when he taxed Chinese steel, a few U.S. plants perked up. Could halal follow? Maybe. A processor in Michigan might open a new line for halal chicken, hiring local workers. But here’s the catch: building takes years, and halal’s global game moves fast. By the time that plant’s running, Brazil might own the market.

What about the little guy? Small halal businesses—think your corner butcher or the food cart slinging kebabs—feel this too. I’ve chatted with owners like Fatima in Chicago, who imports halal spices from Canada. A 25 percent tariff means she pays more or raises prices, risking customers. Big chains like Nestlé, with halal lines in Malaysia, can absorb some costs. Fatima can’t. Over decades, I’ve seen these mom-and-pop shops anchor Muslim communities. Tariffs could squeeze them out.

Then there’s the trade war wildcard. Canada’s already floating 25 percent taxes on U.S. steel and lumber. Mexico’s eyeing U.S. corn. The EU, Brazil, and South Korea might join the fray if Trump’s April tariffs hit. I’ve covered retaliatory tariffs before—China’s 2018 soybean tax crushed U.S. farmers. In halal, it’s trickier. If Malaysia slaps duties on U.S. beef, American exporters lose a $500 million market. The halal industry hates uncertainty, and this is a tornado of it.

Let’s zoom out. The halal market’s grown because it’s global—open borders, free trade, shared standards. I’ve watched it knit together over 20 years, from halal expos in Dubai to certification talks in Washington. Tariffs threaten that. Higher costs could fragment supply chains, pushing countries to go it alone. Indonesia might lean on local beef, even if it’s pricier to produce. The Gulf might double down on Brazilian imports. The U.S., once a halal leader, risks slipping to the sidelines.

Consumers aren’t powerless, though. I’ve seen boycotts—like when Danish goods tanked in Muslim countries after a 2005 cartoon scandal. If U.S. tariffs jack up prices, shoppers might shun American brands. Social media’s buzzing already—hashtags like #HalalTradeWar are popping up. In my travels, I’ve learned Muslims care about value and ethics. If the U.S. looks greedy, they’ll pivot.

So, what’s the fix? Short-term, U.S. halal firms could lobby for exemptions—Trump’s first term saw Apple dodge some tariffs. Long-term, they might diversify, sourcing from tariff-free zones like ASEAN countries. I’ve seen Malaysia’s halal hubs thrive; they could step up. Certifiers could streamline, too, keeping costs down. But the big fix is trade talks. If Trump’s serious about jobs, he’ll negotiate, not just tax. I’ve sat in on WTO meetings—cooler heads can prevail.

The halal industry’s resilient. I’ve watched it weather mad cow scares, pork scandals, and recessions. Tariffs are a gut punch, but not a knockout. American exporters might lose ground, Brazil might gain, and consumers might grumble, but halal’s core—faith and quality—holds firm. Still, the next few months are critical. April’s “liberation day” could reshape the map. As someone who’s tracked this world from slaughterhouse to supermarket, I’d bet on adaptation over collapse. But the cost? That’s on all of us.

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