Prospects and challenges of sukuk (non-interest bond) implementation in ghana

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The purpose of this study is to examine the potential challenges and benefits Ghana can gain from sukuk (a non-interest bond). The government of Ghana is currently battling with debt crisis, and the private sector is competing with the government for domestic funds, forcing interest rates to go high and thereby making it difficult for private businesses to ascertain funds. Sukuk (Islamic, non-interest, or interest-free bonds) is an Islamic financial instrument that operates like conventional bonds. The objectives of this study are to assess the potential challenges of sukuk in Ghana, to find out if the Ghana government can benefit from sukuk, and to find out if businesses can also benefit from sukuk. Questionnaires are administered for experts to respond, and a focused group discussion (FGD) is arranged online for experts to discuss the topic. The data collected via questionnaires are analyzed with SPSS 20.0 and that of FGD are analyzed thematically. The results are then discussed thereof. Findings of the study reveal that government and businesses of Ghana can reap several benefits from Sukuk, such as alternative sources of funding and savings, debt portfolio management, inflation control, reduction of unemployment, exchange rate management, expanding financial inclusion, GDP growth enhancement etc. However, there are some challenges, such as low awareness, religious undertones, lack of Sukuk experts, and the lack of comprehensive framework for sukuk implementation.
A thesis submitted to the department of accounting and finance, Kwame Nkrumah university of science and technology, Kumasi in partial fulfillment of the requirements for the award of degree of master of science in accounting and finance