Infrastructure financing using Sukuks: When perception meets reality

The relationship between infrastructure availability and economic growth has been established in literature. Despite this knowledge, Africa struggles to close its infrastructure investments gap due to non-availability of low cost sustainable financing. Sukuk financing has been touted as a sustainable alternative but uptake has been slow due to its religious-based affiliation. This study sought to assess the acceptability of sukuks for infrastructure investment in a multi-religious country such as Nigeria through a survey of procurement professionals. The results indicate support for the use of non-interest financing and the Profit & Loss sharing model of sukuks. Sukuk financing for infrastructure will relieve governments of unsustainable debt service obligations while improving In-Country value (ICV) for their citizens. It is recommended that governments in Africa create more awareness on the benefits of Sukuk financing to ensure a broad support and buy-in while investing in sukuk training for public officers.