An Islamic finance and business management expert, Amb. Asiwaju Busari Shaamsuddeen Akande has called on the federal government to use the Sukuk innovation to finance all aspects of socioeconomic development in the country.
Akande spoke in Calabar at the 2021 regional summit on Non-Interest Finance Professionals of West Africa with the Theme: Unified Global Legal and Regulatory Framework.
The management expert 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.
He said that the government can also finance the proposed Nigeria Air with Shariah-compliant aircraft finance transactions using what he called 'Ijara Sukuk', a form of lease, which "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 the lessor to the lessee to create a product akin to a finance lease.
Akande disclosed that over the last few years, a number of aviation entities have 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 said: "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.
He said as the Nigerian economy is growing at 2%, there is a need to focus on debt sustainability, using the Sukuk innovation.