Sukuk is an investment certificate. It represents ownership interests in assets which produce profit or generate revenues. Sukuk does not pay interest but generate returns in the form of rents through actual transactions of sale, lease or combination of the two. It is currently a major Islamic financial instrument used to finance major projects in Islamic countries. The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) defined it as securities of equal denomination representing individual ownership interest in a portfolio of eligible existing or future assets.[1] The certificate issued can also serve as collateral in banks for loan and other licenced financial institutions. In Nigeria, these same principles apply, It is a faith-based system put in place to help the government in diversifying its funding sources and also in deepening the Nigerian capital market, mobilising more savings and enhance financial inclusion.

Sukuk bond is issued under different structures to accommodate the unique nature of the different transactions practicable under it. Some of these structures include: Musharakah, Murabaḥah, Mudarabah, Ijarah, Salam, and Istisna.[2]  The Sukuk presents new opportunities for investors like insurance companies, retail investors, high net worth individual, commercial banks, asset manager, private and commercial banks, among others to invest in infrastructure development. The Nigerian Securities and Exchange Commission (“SEC”),4 the regulator of all securities related transactions in Nigeria, recognizes these Sukuk structures under Rule 571 of the SEC Rules.5


Based on the United Nations’ projection, Nigeria’s current population as at Wednesday, July 24, 2019 is 201,214,136, this is equivalent to 2.6% of the total world population, and it is expected to increase to 410,637,868.[3] Currently, the country is urbanising at one of the fastest rates in the world and this has led to… click link to continue reading this inspiring article.

The author, Adewunmi Adebanke is a legal practitioner in Nigeria