Sukuk an Alternative Source of Financing Infrastructure Deficit in Nigeria

Abstract

The infrastructural deficit experienced in Nigeria has spanned over decades mainly caused by poor budgetary allocation as recurrent expenditure always exceeded the capital vis-a-vis debt services. As the country is aspiring for a sound, stable and sustainable globally competitive economy with a GDP of not less than $900 billion, the present administration issued Sukuk as an alternative source of funding part of the 2017 fiscal year’s budget toward addressing the road infrastructural deficit in the country.
The study, therefore, critically reviewed the modus operandi as well as the nexus between Sukuk and the budget. To achieve this, the paper carefully assessed the work of previous scholars using descriptive and content analysis of the documented texts and scholarly articles. The findings posit that there exists a synergy between Sukuk and budget as it addresses the developmental challenges in Nigeria which include critical road infrastructure that triggers globally competitive economy and contributes to foreign exchange earnings to the government and a promising returns to its holders with minimum risk. The study, therefore, recommends more research on Sukuk to explore the appropriate shari'a rulings on issuance and full commitments on the part of government to ensure prompt payment of the rent accruing semi-annually to its holders in order to improve the public trust and foster confidence on part of the investors.