Appraisal of Economic Benefits of Ṣukūk in Financing Budget Deficits in Nigeria

Baita, Abubakar Jamilu

doi:10.4197/islec.32-1.11

Cited by 5 publications

(3 citation statements)

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“…Saungweme and Odhiambo (2019) attempted to analyze the levels of domestic debt in 40 emerging markets and Sub-Saharan African economies, during 1975-2004, and reported significant positive impact of moderate marketable domestic debt (% of GDP) on economic growth. Baita and Daud (2019) have identified need for financing government expenditures as the reason for a fastdomestic debt increase. However, various government efforts for rationalizing public spending have not been successful, resulting in a continuous rise in the size of domestic debt.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Sustainable Developmet Facets: Does Sovereign Debt Accelerate the Economic Growth

Somjai¹,

Vasuvanich²,

Meechaiwong³

et al. 2019

JSSI

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The prime objective of the current study is to investigate the total sovereign debt on the economic growth of Thailand. Since domestic debt is considered to be an economic growth stimulator particularly during the period of recession, therefore, its instruments are intended to analyze in this research. In a country, the lack of funds may negatively influence economic growth, therefore, most countries like to use external debt to finance its expenditures, such as Thailand. This situation can be improved by focusing on these countries developmental research. In Thailand, the information scarcity regarding domestic debt acts as a policy constraint while designing an effective domestic debt mobilization policy. Thus, the present study predominantly aims to investigate the domestic debt effects on Thailand economic growth. The study has examined the domestic debt effects on the economic growth, during 1998-2018. The variables used in this study are extracted from the previous literature and the theoretical framework used in this study. The key variables analyzed are Treasury bills, Government securities, and Investment issues, not forgetting the loans mainly housing loans fund, market loans of Thailand. The study has used the Johansen and Juselius co-integration approach to examine the long run relationship while ECM approach was used to see the speed of adjustment in the short run. Furthermore, we have conducted the Lagrange Multiplier test to all variables to check the presence of autocorrelation. The results show that there is no autocorrelation in the variables. For the instrument of Government securities, we have found that all the variables which are financial sector, social security institutions, insurance companies, and financial sector show a statistically significant result in long run analysis. On the other hand, short run analysis based on ECM model shows that social security institution, insurance companies, financial sector and foreign holders turn to be significant while public sector show insignificant results. The result for ECM also shows that the model is well adjusted in the short run.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Sustainable Developmet Facets: Does Sovereign Debt Accelerate the Economic Growth

Somjai¹,

Vasuvanich²,

Meechaiwong³

et al. 2019

JSSI

View full text Add to dashboard Cite

show abstract

“…Similarly, growth in sovereign (government) sukuk issuance highlights its usefulness in financing government activities (Rahman et al , 2017), and as an effective instrument for financing budget and fiscal needs of the government (IIFM, 2021). Again, sukuk can be an important tool for fiscal sustainability particularly if it forms part of the fiscal policy of a country (Baita and Mustafa, 2019, p. 154).…”

Section: Introductionmentioning

confidence: 99%

Fiscal policy and sukuk market development in OIC countries

Baita

Malami

Al‐Faryan

2023

JIABR

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Purpose This study aims to examine the fiscal policy drivers of sovereign sukuk market development in selected Organization of Islamic Cooperation (OIC) countries. Specifically, the research aims to analyze the effects of fiscal deficit, public debt and government expenditure on sovereign sukuk market development, while controlling for macroeconomic and financial factors. Design/methodology/approach The sample consists of eight OIC member countries that play active role in the global sukuk market which include Saudi Arabia, United Arab Emirates, Malaysia, Indonesia, Qatar, Pakistan, Turkey and Sudan. In addition, the study covers a period of 10 years spanning between 2011 and 2020. Similarly, the study uses three models, namely, random effect, generalized least square and system generalized method of moments panel models. To check for the robustness of the results, the study replaces current values of fiscal policy variables with one-year lagged values. Findings The findings establish that fiscal policy variables significantly influence the development of sovereign sukuk markets. Specifically, public debt is a significant fiscal variable that promotes sovereign sukuk market development, while fiscal deficit has a negative effect on the development of sovereign sukuk market. However, the findings suggest that government expenditure does not influence sovereign sukuk issuance in the OIC member countries. Practical implications The study is significant to both investors and regulators in the sukuk market because it attempts to spotlight the importance of sound fiscal climate in developing sovereign sukuk market. Public debt is a facilitator, whereas fiscal deficit appears to be a constraint. Therefore, policymakers should determine the optimal mix of public debt and fiscal deficit in designing policies that promote sukuk market development. Originality/value The novelty of the study is its focus on the role of fiscal policy variables in facilitating sovereign sukuk market development. The study systematically establishes the link between fiscal policy and sovereign sukuk market in the OIC countries. Previous empirical studies focus extensively on the effects of macroeconomic, financial and institutional factors on sukuk market development.

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“…The obstacles that occur are also a challenge for local governments in allocating their regional revenue and expenditure budgets or APBD to be more effective and efficient (Baita & Mustafa, 2019). However, with the limited APBD, the government can look for other financing sources to overcome this problem.…”

Section: Introductionmentioning

confidence: 99%

The Potential of Municipal Sukuk Issuance in Indonesia - A Review of Theoretical Research

Ulfah

2023

perisai

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The main objective of this study is to provide local authorities with municipal Sukuk as an alternative to financing local infrastructure and developing areas. This study reviews the previous literature examining contemporary municipal sukuk and Discussed issues related to restrictions on the issuance of municipal sukuk. The research shows that the barriers to municipal Sukuk issuance are: Regional Barriers, Credit risk, Political Risk, Credit Weakness among stakeholders, Lack of through understanding of Shariah and financing and implementation. It was an exploratory study and aimed to identify barriers to becoming municipal bonds. Blocks of municipal Sukuk are listed from all possible sources. The study proposes some practical ways to overcome the obstacles to the provision of municipal sukuk in order to promote more municipal sukuk in various regions of the country to support sustainable development through equitable infrastructure distribution.

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Appraisal of Economic Benefits of Ṣukūk in Financing Budget Deficits in Nigeria

Cited by 5 publications

References 0 publications

Sustainable Developmet Facets: Does Sovereign Debt Accelerate the Economic Growth

Sustainable Developmet Facets: Does Sovereign Debt Accelerate the Economic Growth

Fiscal policy and sukuk market development in OIC countries

The Potential of Municipal Sukuk Issuance in Indonesia - A Review of Theoretical Research

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