Securitisation of Sovereign Assets for Sukuk in Nigeria
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Date
2024
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Publisher
Legal Transformation in Muslim Societies
Abstract
According to the Nigerian Debt Management Office (DMO), the volume of
Nigeria’s sovereign Sukuk, an Islamic instrument for funding infrastructure projects, reached
over 600 billion Naira realised from five issuances between 2017 and 2022. Despite the success
recorded in the issuance and the increasing interest by investors globally in the Nigerian Islamic
Capital Market, the securitisation of sovereign assets for the issuance of Sukuk remains
controversial due to various Shari’ah issues identified with the process. This article reviews the
existing literature on the securitisation of sovereign assets for Sukuk in Nigeria. By synthesising
a wide range of scholarly works, policy documents, and empirical studies, the literature review
undertaken in this article aims to elucidate the key factors, challenges, and implications
associated with the approach to securitisation. The review reveals that while securitisation of
sovereign assets can offer benefits such as diversification of funding sources, unlocking
dormant assets, and attracting foreign investment, it also presents challenges such as ownership
complexities, potential loss of control over assets, and market volatility. The analysis presented
in this article contributes to a deeper understanding of the securitisation of sovereign assets for
Sukuk issuance in Nigeria. As Nigeria seeks to sustainably meet its funding requirements and
align with Islamic finance principles, the insights presented in this article serve as a valuable
guide for informed decision-making in the realm of sovereign asset-backed Sukuk issuance