Sukuk Financing and Sustainable Economic Growth in Nigeria

ABSTRACT : This study investigates the impact of Sukuk financing on sustainable economic growth in Nigeria, focusing on FGN, sub-national, and corporate Sukuk from Q1 2013 to Q4 2024. Using secondary data from the SEC Nigeria, Federal Government securities reports, NBS, World Bank, and IMF, the study applies the Autoregressive Distributed Lag (ARDL) approach to capture both short- and long-run dynamics. Empirical results reveal a long-run cointegrating relationship, with all Sukuk types positively and significantly influencing GDP growth. The negative and significant error correction term suggests rapid adjustment to long-run equilibrium, highlighting Sukuk’s role as a counter-cyclical financing tool. Diagnostic tests confirm the robustness and stability of the model. The findings underscore Sukuk’s potential to mobilize capital, finance infrastructure, and support sustainable economic development. Policy recommendations include institutionalizing federal Sukuk issuance, strengthening sub-national frameworks, promoting corporate Sukuk, and aligning issuances with sustainability objectives.