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Sukuk is a strategic Islamic Finance Instrument that has catalyzed socio-economic development across the globe. According to Refinitiv's Sustainable Islamic Finance Monitor, ESG Sukuk issuances in the first half of 2021 reached $4bn.
With a good record of issuing over three (3) Sukuk instruments since 2017, Nigeria will benefit more in terms of socio-economic development if it has more structured projects. Sukuk is the right instrument that can achieve development, as it allows one to be disciplined and focus on the underlying asset class that generates cash and to ensure that the structure is viable and sustainable.
This edition of Islamic Finance Weekly anchored by Bukola Akinyele-Yisau features Chinua Azubike, CEO, InfraCredit Nigeria. He speaks on "Sukuk instrument, Infrastructure projects, and Sustainable finance in the economy".
According to him, Nigeria needs more structured projects to benefit from Sukuk. Azubike believes Sukuk needs to be simplified as much as possible, to attract more retail investors in the market and broaden its scope across the nation contributing to economic development. Recently the Debt Management Office announced the Fourth Sukuk to be issued for a Tenor of 10 years at a rental of 12.8% per annum.
It is valued at about N250bn and is tied to infrastructure projects including road rehabilitation across Nigeria. The impact of Sukuk is far-reaching in the country through roads and bridges, the time has come for Nigeria to move beyond infrastructure-tied Sukuk, to other critical sectors like Education, Healthcare, Housing, and Sustainable environmental-based projects.
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