An erudite professor of Islamic studies, Professor Abdulrazzaq Abdulmajeed Alaro, who was the former head of the Department of Islamic Law at the University of Ilorin and an adviser to the Central Bank of Nigeria on Islamic finance, has debunked the allegation that public roads constructed under “SUKUK ” in Nigeria are sponsored by Saudi Arabia or connote any form of an Islamisation agenda.
In an extensive interview with the Muslim Media Watch Group aired on NTA Ilorin, Alaro explained that issuing “SUKUK” means embracing the Islamic finance option of raising money from the public for capital projects in society.
He said, “Sukuk” literally means a certification representing ownership in an asset like a road.
According to him, the idea was muted in 2015 when the federal government of Nigeria was challenged to look at other options for financing public projects they didn’t have money to undertake. However, this did not materialise until 2017, when Nigeria entered into “Sukuk” financing, three years after the United Kingdom started it as a window for financing big projects.
Alaro further explained how Sukuk had helped construct and rehabilitate roads across every geopolitical zone in Nigeria. According to him, the roads being constructed represented the underlying asset of SUKUK, which the federal government often paid about 16% rent to subscribers for seven years, after which they were bought out.
He explained that 2017 the federal government called Nigerians to subscribe to the first Sukuk for a minimum of ten thousand naira only. The offer generated over N100b within a short period. In 2024, the “Sukuk” fund subscribed by Muslims and non-Muslims was settled entirely.
According to him, Sukuk in Nigeria has constructed/rehabilitated about 124 (5800km) significant roads with commendable landmarks across the country.
In 2018, the federal government opened another Sukuk, which was also fully subscribed. Six different Sukuk offers have been issued so far; hence, the road signposts read Sukuk $(I), Sukuk( II), etc.
Professor Alaro reiterated that Saudi Arabia has no direct interest in Nigeria’s Sukuk offers, except that the Islamic Development Bank( IDB), which is another financial institution operating on Islamic banking, has its headquarters in Saudi Arabia.
In the interview, he explained that Saudi Arabia also uses Sukuk to finance multi-billion dollar projects. Thus, they have nothing to do with road construction in Nigeria.
While highlighting the benefits of Sukuk and Islamic financing, he confirmed that Islamic Co-operation for Development, a unit of the IDB, has invested millions of dollars in financing projects in many parts of the world, including Nigeria.
He further asserted that Nigeria’s four full-fledged Islamic banks, namely Jaiz, Taj, Lotus and Alternative Bank, are all growing well and honouring their obligations to their shareholders, customers and other stakeholders, which cut across Muslims and non-muslims alike.
For example, ” Jaiz bank started in 2024 with about N12b but now has an asset base of about N600b in the first quarter of 2024″, he affirmed.
Alaro, therefore, called on everyone to embrace Islamic finance to promote accelerated societal development. Kiin Media