“The issue is simple, there is no mortgage.” Finance: Sovereign Sukuk is a bitter tool


11:38 PM

Tuesday 08 June 2021

Books – Moataz Abbas:

Dr. Mohamed Maait, Minister of Finance, said that the Sovereign Sukuk Law is a financing tool, but it is consistent and consistent with the terms of Islamic Sharia.

And, “Mait,” added, in a telephone interview to the “A Last Word” program, broadcast on the “On E” channel, today, Tuesday: “There is no text in the law approved by the People’s Assembly that speaks of the right to “censorship” in the first place, meaning that there is no right over The original, but the text of the law speaks of the right of usufruct, which does not mean that these instruments finance the project and its revenues pay the value of this debt and not the asset itself.

He pointed out that Islamic sukuk aims to create a new asset, continuing: “We want to make a new asset or complete an asset that is still in the construction stage, and then we are talking about a future and not a past. The already existing asset has nothing to do with sukuk. I’m talking about the new and the future.”

He explained that the advantage of this type of financing tools is desired by a number of investors as it is compatible with the provisions of Islamic Sharia, especially that the volume of this type of financing in the world markets amounts to 3 trillion dollars, and countries such as Saudi Arabia, Kuwait, Bahrain, Britain, Malaysia and Indonesia benefit from it, wondering: “Why is Egypt?” Are you afraid of these countries?!”

He continued, “The idea is that there is a new financing tool that we need to enter, like all countries, and a desirable quality of investors for its compatibility with Islamic Sharia. The issue is simple, there is no mortgage or need.”

He continued, saying: “We want people in the street to have goodwill, as long as there are investors who like this type of financing tool, why don’t we use it?! And I, as Minister of Finance, are in the state of development that Egypt is experiencing and we have a budget with a deficit and therefore we need investors and financing tools.

The Minister of Finance confirmed that the law allows the issuance of sukuk inside and outside Egypt, adding: “We will use them in the local market with diversity, but for the outside there is a large market and it has users from private investors in sovereign sukuk and those interested in it.”

He revealed that the ministry is preparing for the first sovereign sukuk offering as soon as the law is issued and published in the Official Gazette. A specialized team from the ministry in this type of proposition communicates with international investment banks; To determine the markets in which the offering is expected, and the value of the offering, saying: “I hope that we will be ready during the next fiscal year 2021-2022.”

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