Sukuk, Infrastructural Development and Economic Growth: A Theoretical Lens for Abandoned Projects in Nigeria

Abstract

The purpose of this paper is to provide an alternative way for abandoned projects in Nigeria through Sukuk. Sukuk have been attracting the attention of investors and become most popular in many global markets. Further, Sukuk have been used for funding many infrastructure developments as an alternative for conventional bonds. The study adopts a descriptive approach to highlight the significance of Sukuk as an investment tool to improve the infrastructural development and economic growth via abandoned projects in Nigeria because this experience is still at the infancy stage in the country. This study attempts to give the financial solution by depending on internal foreign loans which comprise the interest rate. The outcome indicates that Sukuk is the better alternative and reliable in financing abandoned projects and the new one for the development of the country. Also, study shows that Sukuk is the most significant financial instrument in the market because it has no interest rate. Many Muslim countries and non-Muslim countries have applied Sukuk for their infrastructure development and economic growth. The study will be a primary reference for different governments at the state and federal level who intend to adopt similar instruments for abandoned projects in their respective nations. As an individual is qualified to purchase Sukuk, this might lead to a better wealth distribution amongst people. The study has implication for the policymaker and government in terms of fully adopting Sukuk to address the issues of abandoned projects, thereby enhancing the social wellbeing of the people and the development of the economy. The study is among the studies that thoroughly and critically appraise Sukuk as an alternative for the government to tackle issues of abandoned projects in the country. It contributes to the literature in the field of Islamic finance according to the philosophy of profit and loss sharing among investors to solve different challenges in society.