Sukuk As A Tool Towards Development: How Kenya Can Use Sukuk As Alternative Source Of Funding Development Projects
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Date
2019Author
Mahamud, Asli Osman
Type
ThesisLanguage
enMetadata
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INTRODUCTION
Globally, the growing demand for development, especially infrastructure development, is not
proportional to the available funds to finance such development. The Organization of Economic
Cooperation and Development (OECD) projects that a global estimated sum of USD 71 Trillion
would be required by 2030 for investments in road, rail, telecommunication, electricity and water
infrastructure, without taking into account seaports, airports and social infrastructure.1 The World
Economic Forum, on the other hand, estimates the present global infrastructure demand presently
as USD 4 Trillion in annual expenditure.2 The African Development Bank on the other hand
estimates that the financing required to close Africa’s infrastructure deficit amounts to USD 93
billion annually till the year 2020.3
Closer home, the World Bank reports that Kenya’s infrastructure financing deficit is at USD 2.1
Billion annually, and this accordingly poses a serious constraint to growth and overall
development.4 The current budgetary allocation for infrastructure projects is inadequate to attain
the development goals. The International Budget Partnership5, in its review of Kenya’s 2016/2017
budget, found that the total spending for 2016/17 rose to Ksh 2.05 trillion and out of this, the government collected Ksh 1.50 trillion in revenue leaving a deficit of roughly Ksh 555.4 billion,
which is 6 percent smaller than the 2015/16 budgetary deficit.6
Also noteworthy is that the share of the budget allocated to infrastructure was reduced from 27 to
25 percent.7 Despite this reduction, infrastructure still accounted for a largest share of the total
development expenditure.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Law [291]
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