PATRICK ABANG Calabar –
An Islamic finance and business management expert, Shaamsuddeen Akande, has called on the Federal Government to use the Sukuk innovation to finance all aspects of economic development in Nigeria.
Akande disclosed this at a workshop in Calabar, on Non Interest Finance Professionals of West Africa 2021 regional summit with the theme: “Unified Global Legal and Regulatory Framework”.
Akande, who is the founder of the first Islamic Institute of Accounting and Finance in Africa, said Islamic finance is a rapidly growing sector in the international finance industry, and a principled approach to financing as well as an alternative view of leasing.
“I strongly advise the Federal Government to go innovative with the use of Sukuk financing, not limiting it to road construction without having plans to generate revenue from it.”
According to him, the current size of the Islamic Finance market ranges from US$2.5 trillion to US$2.7 trillion, with an expectation to reach US$3.4 trillion by the end of 2023.
As a result, he said that the government can also finance the proposed Nigeria Air with Shariah compliant aircraft finance transactions using what he called ‘Ijara Sukuk’, which is a form of lease were “the owner of the aircraft transfers the legal right to use and derives profit from the aircraft to another person for an agreed period and agreed rent.”
He said that an ijara can be combined with sale and purchase undertakings between lessor to lessee to create a product akin to a finance lease.
The Islamic Finance expert, disclosed that over the last few years, a number of aviation entities has made a foray into the Islamic Finance market, including Emirates, Etihad Airlines, Saudi Arabian Airlines, and other Eastern and some African Airlines such as Ethiopian airlines.
Akande also said that there is also a growing appetite to explore more innovative Islamic products increasing number of western and eastern countries.
“Federal government can also benefit from the Islamic Finance global asset as it is sharing common goal with sustainable societal impacts.
“Nigeria in particular and West Africa in general could further go innovative such that the Security and Exchange Commission (SEC) could establish a Green Sukuk Framework, under which SEC and its subsidiaries could raise Green Sukuk in conjunct with SEC’s sustainability strategy.”
He said as Nigerian economy is growing at 2%, there is need to focus on debt sustainability, using the Sukuk innovation.
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