Sovereign Sukuk and Its Importance in Achieving Sustainable Development , A Comparative Jurisprudential Study

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Al-Azhar University, Egypt

Abstract

Sovereign sukuk has witnessed significant growth recently, becoming a financial tool utilized by investors seeking Sharia-compliant investment opportunities. The Egyptian government has issued sovereign sukuk aimed at providing the necessary liquidity to fund developmental and green projects. However, the legitimacy of sovereign sukuk has sparked considerable debate. This research addresses the topic from a comparative jurisprudential perspective, employing an inductive approach to examine jurisprudential texts on relevant issues, followed by a comparative analytical methodology. The study begins by outlining the theoretical framework of sovereign sukuk, including their nature, pillars, types, and distinguishing features compared to other financial instruments. It then discusses the critical jurisprudential issues required to ascertain the Sharia ruling on these sukuk, followed by an exploration of the different jurisprudential views on their legitimacy. The study also details the Sharia-compliant guidelines for sovereign sukuk. Given the importance of sovereign sukuk in achieving sustainable development, this research addresses this aspect by explaining the nature of sustainable development sukuk and green sovereign sukuk, along with the Islamic perspective on sustainable development goals relating to economic, environmental, and social development. The study concludes by highlighting the importance of sovereign sukuk in achieving these three aspects.
The primary finding of this research is that sovereign sukuk, as a type of Islamic sukuk, shall be permissible if it adheres to Sharia-compliant guidelines and undergoes Sharia supervision to ensure its conformity with Islamic law. It also emphasizes the role of sovereign sukuk as a crucial financing tool in achieving sustainable development.
 

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