The return on sukuk reached 18% in Sudan and many studies reveal that return on sukuk in Egypt may reach 25-30% and this will solve the country’s economic problems, said Adel Hamid, vice dean of Faculty of Commerce of Al-Azhar University.
Hamid affirmed that sukuk is capable of transferring Egypt’s economy from being indebted to being a participant.
“To make sukuk issuance succeed, the potential obstacles and problems shall be thoroughly studied as the country’s economy faces many challenges as a result of corruption that lasted a long time,” he noted.
On the sidelines of “Sukuk between Theory and Practice” conference, Hamid confirmed that sukuk is the only way out for the government amid the large internal and external debts, widening budget deficit expected to reach EGP 200 billion this year, balance of payments deficit that reached US$ 12.6 billion, drop in foreign reserves to US$ 13.6 billion, fall of economic growth rate to 2.4% down from the expected 4%.
The unemployment rate rose to 13%, poverty rate reached 40%, sovereign credit rating was cut to B- and inflation rate also rose.
Hammad stated that some projects have the most priority to be opened for subscription through sukuk such as Sinai development project which requires EGP 100 billion as well as wheat silos, packaging factories and Farouk El-Baz’s Development Corridor project.