One of the main targets of introducing sukuk is to motivate Egyptians who own investments outside the country worth US$ 200 billion to transfer their investments to Egypt as the Islamic financial instrument represent a low risk investment that achieves high growth rates globally, said Ahmed El Naggar, adviser to the Minister of Finance.
Sukuk also targets to attract investments of international financial institutions and authorities as 70% of subscriptions to sukuk have come from non-Islamic international institutions which seek low-risk, high profit investments.
El Naggar affirmed that the various types of sukuk structures represent a good opportunity to attract funds of the non-official sector which holds high liquidity outside the banking sector and funds of 85% of people who do not have banking accounts.
Islamic banks will compete strongly in the auctions because they are mainly investing in Islamic financing products as well as conventional banks which seek to invest in high-profit instruments, he noted.
Egypt’s economic problem will not be solved through a sole financing instrument such as sukuk, it can be overcome instead through different kinds of financial structures, he concluded.
