ASSESSING THE LEVEL OF SUKUK BONDS UTILISATION FOR INFRASTRUCTURAL DEVELOPMENT IN KADUNA, NIGERIA

Abstract

Poor road conditions contribute significantly to road traffic accidents, which remain a leading cause of death and injury. The aim of this study is to evaluate the extent of Sukuk bond utilization and assess its effectiveness in financing and delivering infrastructural projects within Kaduna State, with a view to determining how this non-interest financial model addresses the state's infrastructure deficit and enhances socio-economic development. This study adopted a quantitative research design, which is appropriate for examining measurable variables such as levels of awareness, utilization, and achievements of Sukuk bonds in infrastructural development. The population consisted of registered and actively practicing construction professionals in Kaduna State, Nigeria. Using the Krejcie and Morgan (1970) sample size determination table, the recommended sample size for a finite population of 150 is 108. This study adopted a probability sampling approach, specifically a combination of simple random sampling and stratified random sampling. The questionnaire was designed to obtain information on the types of Sukuk bonds used, the factors influencing their utilization, and the achievements of Sukuk financing in infrastructural development in Nigeria. The study revealed that respondents were generally aware of different Sukuk bond structures, with Ijara Sukuk emerging as the most commonly recognized and utilized in the Nigerian construction industry. The regression analysis revealed that the types of Sukuk bonds and factors affecting their utilization jointly explained 42.7% of the variance in Sukuk utilization within the construction industry. Government agencies and regulators should encourage the issuance of a wider range of Sukuk structures beyond Ijara. Options such as Musharaka, Mudaraba, and hybrid Sukuk should be explored to increase flexibility and broaden applicability to diverse infrastructure projects.