Main Article Content

Abstract

Introduction
Nigeria continues to face persistent development challenges, including infrastructure deficits, widespread poverty, financial exclusion, and increasing vulnerability to climate change. Conventional development financing sources such as tax revenues, foreign direct investment, and official development assistance remain insufficient to bridge the substantial financing gap required to achieve the Sustainable Development Goals (SDGs). This has renewed interest in alternative, ethical, and inclusive financing frameworks.
Objectives
This study examines the role of Islamic finance as a complementary development financing mechanism for advancing the SDGs in Nigeria. Specifically, it evaluates the effectiveness of sovereign Sukuk in infrastructure development (SDG 9), Islamic social finance instrument, Zakat and Waqf in poverty alleviation and social welfare (SDGs 1, 2, 3, and 6), Islamic microfinance in financial inclusion (SDG 8), and Green Sukuk in climate action and renewable energy financing (SDGs 7 and 13).
Method
The study adopts a qualitative and analytical approach, drawing on a systematic review of post-2021 academic literature, policy reports, and institutional data. Descriptive and comparative analyses are complemented by case-based evidence from Nigeria, which has emerged as a regional hub for Islamic financial innovation.
Results
Findings indicate that Islamic finance instruments demonstrate strong alignment with sustainable development objectives through asset-backed financing, risk-sharing, and redistributive mechanisms. Nigeria’s experience with sovereign Sukuk illustrates improved project accountability and infrastructure delivery, while Zakat and Waqf contribute to community-level service provision. However, the scalability of Islamic finance across SSA is constrained by regulatory fragmentation, liquidity management challenges, low public awareness, and limited standardisation.
Implications
Policymakers in Nigeria and Sub-Saharan Africa should strengthen regulatory frameworks, improve standardisation, and promote public awareness of Islamic finance instruments to enhance their scalability and effectiveness as complementary financing mechanisms for achieving sustainable development goals.
Originality/Novelty
This study contributes to the literature by providing an integrated, instrument-specific assessment of Islamic finance and SDG implementation in SSA, offering policy-relevant insights grounded in recent empirical evidence.

Keywords

green sukuk Islamic finance Islamic microfinance Nigeria sukuk Sustainable Development Goals waqf zakat

Article Details

How to Cite
Yusuf, J. A., Ayuba, I. A., & Muhammed, A. T. (2026). Islamic finance as a tool for achieving the Sustainable Development Goals (SDGs): Evidence from Nigeria. Journal of Islamic Economics Lariba, 12(1), 839–862. https://doi.org/10.20885/jielariba.vol12.iss1.art30

References

  1. Abdeldayem, M., & Aldulaimi, S. (2023). Developing an Islamic crowdfunding model: A new innovative mechanism to finance SMEs in the Middle East. International Journal of Organizational Analysis, 31(6), 2623–2644. https://doi.org/10.1108/IJOA-02-2022-3159

  2. Abdinur, M. A., & Ondes, T. (2022). The impact of Islamic financing on the small medium enterprises (SME’s) performance in Lasanod Somalia. International Journal of Academic Research in Accounting, Finance and Management Sciences, 12(1), Pages 15-27. https://doi.org/10.6007/IJARAFMS/v12-i1/11813

  3. Abdul Razak, S. H. (2020). Zakat and waqf as instrument of Islamic wealth in poverty alleviation and redistribution: Case of Malaysia. International Journal of Sociology and Social Policy, 40(3/4), 249–266. https://doi.org/10.1108/IJSSP-11-2018-0208

  4. Abdullah Othman, A. H., & Haron, R. (2024). Shari’ah instruments that facilitate Islamic green finance. In Islamic Green Finance. Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9781032672946-20/shari-ah-instruments-facilitate-islamic-green-finance-anwar-hasan-abdullah-othman-razali-haron

  5. Abdullahi, A., Othman, A. H. A., & Kassim, S. (2021). Financial inclusion enhancement through the adoption of Islamic microfinance in Nigeria. International Journal of Ethics and Systems, 37(3), 486–505. https://doi.org/10.1108/IJOES-02-2021-0040

  6. Adeojo, J. (2022). Nigeria’s Green Bond Programme report: Aspirations, realities and solutions. Heinrich-Böll-Stiftung.

  7. Adepoju, O. O. (2021). Analysis of road transportation infrastructure construction and maintenance for sustainable development in south-western Nigeria. Journal of Sustainable Development of Transport and Logistics, 6(1), 49–58. https://doi.org/10.14254/jsdtl.2021.6-1.4

  8. African Development Bank. (2020, January 30). African Economic Outlook 2020. African Economic Outlook 2020. https://www.afdb.org/en/documents/african-economic-outlook-2020

  9. Ahmad, F., Boumaiza, A., Yazici, M., Taşaltın, N., & Özmen, S. (2026). From global mapping to local action: Green finance, regulatory frameworks, and policy transformation for sustainable energy transition in qatar and türkiye. Sustainable Development, 34(2), 1648–1684. https://doi.org/10.1002/sd.70373

  10. Ahmed, H. (2023). Islamic capital: Ethical foundations of an equitable economic system (1st ed.). Islamic Development Bank Institute. https://doi.org/10.55780/Re23006

  11. Ahmed, H., Mohieldin, M., Verbeek, J., & Aboulmagd, F. (2015). On the Sustainable Development Goals and the Role of Islamic Finance. World Bank, Washington, DC. https://doi.org/10.1596/1813-9450-7266

  12. Ahmed, U., Maruf, A., Alam, S., & Azizah, L. (2024). The role of islamic finance in sustainable and green transition. Suhuf, 36(2). https://doi.org/10.23917/suhuf.v36i2.6314

  13. Akhter, A., Javed, M. Y., & Akhter, J. (2025). Research trends in the field of Islamic social finance: A bibliometric analysis from 1914 to 2022. International Journal of Ethics and Systems, 41(2), 455–483. https://doi.org/10.1108/IJOES-03-2023-0044

  14. Alhammadi, S. (2026). Islamic finance as a driver for enhancing economic sustainability and innovation in the GCC. Journal of Science and Technology Policy Management, 17(1), 25–46. https://doi.org/10.1108/JSTPM-11-2023-0206

  15. Alshater, M. M., Saba, I., Supriani, I., & Rabbani, M. R. (2022). Fintech in islamic finance literature: A review. Heliyon, 8(9). https://doi.org/10.1016/j.heliyon.2022.e10385

  16. Apriani, R. M. (2025). The collaboration of zakat and CSR in improving access to clean water in Gunungkidul regency. Mabsya: Jurnal Manajemen Bisnis Syariah, 7(2), 33–50. https://doi.org/10.24090/mabsya.v7i2.14293

  17. Asutay, M., & Yilmaz, I. (2025). Financialisation of Islamic finance: A polanyian approach on the hegemony of market logic over Islamic logic. New Political Economy, 30(2), 267–286. https://doi.org/10.1080/13563467.2024.2424170

  18. Baina, N., Andrew, N., & Micheal, M. (2025). Exploring the impact of islamic finance principles on micro and small enterprise performance: A literature review. Asian Journal of Economics, Business and Accounting, 25(1), 245–251. https://doi.org/10.9734/ajeba/2025/v25i11646

  19. Baita, A. J., & Muhammad Bashir, Z. (2024). Islamic financing through sovereign ṣukūk: Advancing sustainable road infrastructure in Nigeria. Journal of Islamic Business and Management (JIBM), 14(2), 182–197. https://doi.org/10.26501/jibm/2024.1402-006

  20. Baita, A. J., & Suleiman, H. H. (2021). Sukuk and SDG-9 “Industry, Innovation and Infrastructure” in Sub-Saharan Africa: Achievements, Challenges and Opportunities. In M. M. Billah (Ed.), Islamic Wealth and the SDGs (pp. 599–620). Springer International Publishing. https://doi.org/10.1007/978-3-030-65313-2_31

  21. Ben Jedidia, K., & Ghroubi, M. (2025). Islamic finance and SDGs: Bibliometric review and future research agenda. Journal of Chinese Economic and Business Studies, 23(3), 329–362. https://doi.org/10.1080/14765284.2024.2445959

  22. Chapra, M. U. (2008). The Islamic vision of development in the light of Maqasid al-Shari’ah. International Institute of Islamic Thought.

  23. Ekawaty, M. (2026). Zakat as an slamic social finance instrument for achieving the sustainable development goals: A prisma-based systematic review and meta-analysis on poverty reduction and social empowerment. Veredas Do Direito, 23, e234566. https://doi.org/10.18623/rvd.v23.4566

  24. Fatwa, N., & Hashri, M. A. (2024). Islamic social financing of the national zakat amil agency program for support ensures the availability and sustainable management of water and sanitation for all (case study of islamic boarding schools riyadul awamil Indonesia). International Journal of Religion, 5(11), 2096–2102. https://doi.org/10.61707/1rxkhs42

  25. Fauzan, F., Al Farooqi, I., Pratiwi, A., & Mauliyah, N. I. (2025). Integration of Islamic social finance for sustainable economic development in the rural areas of Situbondo regency, East Java, Indonesia. Journal of Islamic Economics Perspectives, 7(1), 98–109. https://doi.org/10.35719/ahvk1x86

  26. Ghassan, H. B., & Krichene, N. (2025). Theoretical and analytical approach of financial stability: Islamic perspective. Turkish Journal of Islamic Economics, 12(1), 140–175. https://doi.org/10.26414/A4148

  27. Harahap, B., Risfandy, T., & Futri, I. N. (2023). Islamic law, islamic finance, and sustainable development goals: A systematic literature review. Sustainability, 15(8), 6626. https://doi.org/10.3390/su15086626

  28. Hasnat, Md. A., Khandakar, H., Rahman, Md. A., Islam, S. N., & Hasan, K. K. (2025). Capitalism in modern ignorance (jahilliyah): Exploring Islamic alternatives to reshape human behaviour and provide solutions for the 21st century. International Journal of Islamic and Middle Eastern Finance and Management, 18(4), 975–991. https://doi.org/10.1108/IMEFM-08-2024-0393

  29. Hassan, M. K., Alshater, M. M., Hasan, R., & Bhuiyan, A. B. (2021). Islamic microfinance: A bibliometric review. Global Finance Journal, 49, 100651. https://doi.org/10.1016/j.gfj.2021.100651

  30. Hassan, M. K., Muneeza, A., & Hasan, R. (2025). Islamic finance and sustainable development (1st ed.). Cambridge University Press. https://doi.org/10.1017/9781009464963

  31. Hesary, F. T., Zakari, A., Alvarado, R., & Tawiah, V. (2022). The green bond market and its use for energy efficiency finance in Africa. China Finance Review International, 12(2), 241–260. https://doi.org/10.1108/CFRI-12-2021-0225

  32. Hotman, H., Hilman, H., & Ahmad, N. (2024). Islamic microfinance: Addressing poverty alleviation and entrepreneurship development. Accounting Studies and Tax Journal (COUNT), 1(2), 140–149. https://doi.org/10.62207/2c7r5r03

  33. Hussein Kakembo, S., Abduh, M., & Alwee Pg Hj Md Salleh, P. M. H. (2021). Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda. Journal of Small Business and Enterprise Development, 28(4), 537–552. https://doi.org/10.1108/JSBED-04-2019-0126

  34. Iqbal, Z., & Mirakhor, A. (2011). An introduction to Islamic finance: Theory and practice. Wiley.

  35. Islamic Financial Services Board (IFSB). (2023). Islamic Financial Services Industry Stability Report 2022. Islamic Financial Services Board Stability Report 2022. https://www.ifsb.org/publication-document/islamic-financial-services-industry-stability-report-2022/

  36. Judijanto, L., Siswoyo, S., & Rusdi, M. (2025). Impact of zakat, waqf, and Islamic microfinance on poverty alleviation in Indonesia. West Science Islamic Studies, 3(02), 132–141. https://doi.org/10.58812/wsiss.v3i02.1839

  37. Kholil, A., Zuardi, M., Amrin, & Juryatina. (2025). Optimizing Islamic financial instruments in Indonesia to support SDGs: Maqashid syariah perspective. Profetika: Jurnal Studi Islam, 26(01), 191–210. https://doi.org/10.23917/profetika.v26i01.9217

  38. Kismawadi, E. R. (2024). Islamic fintech: Navigating the regulatory framework and promoting financial inclusion in gulf cooperation council (GCC) countries. Journal of Islamic Marketing, 16(6), 1742–1769. https://doi.org/10.1108/JIMA-02-2023-0061

  39. Korkut, C. (2025). Waqf and zakat as drivers of community-based climate resilience in the net zero transition. Discover Global Society, 3(1), 178. https://doi.org/10.1007/s44282-025-00333-y

  40. Kumar, B. R. (2025). Sustainable finance investments in different regions of world. In Green finance: Navigating the sustainable investment landscape (pp. 169–244). Springer Nature Switzerland. https://doi.org/10.1007/978-3-032-03333-8_7

  41. Laldin, M. A., & Djafri, F. (2021). The role of Islamic finance in achieving sustainable development goals (SDGs). In M. K. Hassan, M. Saraç, & A. Khan (Eds.), Islamic Finance and Sustainable Development: A Sustainable Economic Framework for Muslim and Non-Muslim Countries (pp. 107–126). Springer International Publishing. https://doi.org/10.1007/978-3-030-76016-8_6

  42. Ma, Y., & Sukmana, R. (2025). Takeaways from Islamic social finance and sustainable development goals discourse: Review and bibliometric analysis on future directions for zakat, waqf and Islamic microfinance. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-06-2024-0227

  43. Mahmoud, M. A., Umar, U. H., Danlami, M. R., & Ado, M. B. (2025). An analysis of Islamic financing access in Nigeria: Perspectives of MSME owners. International Journal of Islamic and Middle Eastern Finance and Management, 18(1), 49–67. https://doi.org/10.1108/IMEFM-02-2024-0072

  44. Maqbool, M. K. B. (2026). Islamic financial instruments for climate action: A dual analysis of green sukuk and policy framework in Pakistan. Journal of Islamic Accounting and Business Research, 1–22. https://doi.org/10.1108/JIABR-07-2025-0403

  45. Marandi, A., & Main, K. L. (2021). Vulnerable city, recipient city, or climate destination? Towards a typology of domestic climate migration impacts in US cities. Journal of Environmental Studies and Sciences, 11(3), 465–480. https://doi.org/10.1007/s13412-021-00712-2

  46. Mazzucato, M. (2023, September 8). Financing the sustainable development goals through mission-oriented development banks. https://www.ucl.ac.uk/bartlett/public-purpose/publications/2023/sep/financing-sustainable-development-goals-through-mission-oriented-development-0

  47. Miao, Q., & Nduneseokwu, C. (2024). Global environmental leadership: Addressing the triple planetary crisis. In Q. Miao & C. Nduneseokwu (Eds.), Environmental Leadership in a VUCA Era: An Interdisciplinary Handbook (pp. 37–119). Springer Nature. https://doi.org/10.1007/978-981-96-0324-4_2

  48. Missaglia, M., & Vaggi, G. (2025). Finance and development. In M. Missaglia & G. Vaggi (Eds.), Introduction to development economics: An alternative approach to growth, sustainability and cooperation (pp. 205–230). Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-67926-1_14

  49. Mohamud, I. H., & Mohamud, A. A. (2023). Impact assessment of Islamic microfinance on small and medium-sized enterprises in Mogadishu, Somalia. International Journal of Advanced and Applied Sciences, 10(9), 174–185. https://doi.org/10.21833/ijaas.2023.09.020

  50. Mohd Yunus, S., & Mahadi, N. F. (2025). Investigating the role of microfinance in Islamic finance for poverty alleviation. International Journal of Fiqh and Usul Al-Fiqh Studies, 9(3), 133–145. https://doi.org/10.31436/ijfus.v9i3.411

  51. Muhammad, A. A., Rohana, Ardo, A. M., & El-Nafaty, N. U. (2023). Achieving the sustainable development goals of water and sanitation through Islamic models of zakat and waqf: A case study of Gombe State Nigeria. Journal Transformation of Knowledge, 1(2), 38–46. https://ojs.yptransteknologi.sch.id/index.php/jtk/article/view/12

  52. National Treasury of South Africa. (2014). Republic of South Africa: Sovereign Sukuk issuance report. National Treasury of South Africa.

  53. Ngwenya, N., & Simatele, M. D. (2020). Unbundling of the green bond market in the economic hubs of Africa: Case study of Kenya, Nigeria and South Africa. Development Southern Africa, 37(6), 888–903. https://doi.org/10.1080/0376835X.2020.1725446

  54. Norton, S. D. (2025). Financial innovation intra Muslim capital markets and inter global counterparts: Implications of differences. Qualitative Research in Financial Markets, 17(1), 193–209. https://doi.org/10.1108/QRFM-04-2023-0088

  55. Oyesanya, O. S., & Azeez, A. O. (2025). Ṣukūk as a catalyst for green infrastructure financing in Nigeria. Fountain University Journal of Arts and Humanities, 2(1), 57–80. https://www.fountainjournals.com/index.php/fujah/article/view/864

  56. Rahayu, S. K., Komala, A. R., & Yusuf, S. N. B. S. (2024). Enhancing Islamic banking through accounting and taxation harmonization: A comparative study of indonesia and Malaysia. Australasian Accounting, Business and Finance Journal, 18(5). https://doi.org/10.14453/aabfj.v18i5.09

  57. Raihan, A., & Sarker, T. (2026). Financial mechanisms for advancing environmental sustainability: A comprehensive review. Green Technology, Resilience, and Sustainability, 6(1), 1–33. https://doi.org/10.1007/s44173-026-00029-9

  58. Raimi, L., Abdur-Rauf, I. A., & Olaide Raimi, B. (2024). Interdependence of halal entrepreneurship and islamic finance for creating a strong halal ecosystem. Journal of Islamic Marketing, 16(3), 929–954. https://doi.org/10.1108/JIMA-05-2023-0162

  59. Rusydiana, A. S., Sukmana, R., Laila, N., & Riani, R. (2025). Waqf development models for sustainable development goals: An analytic network process approach. International Journal of Islamic Finance and Sustainable Development, 17(1). https://doi.org/10.55188/ijifsd.v17i1.929

  60. Sabiu, T. T., & Abduh, M. (2021). Impact of Islamic banking inclusion on SME employment growth in Nigeria. Journal of Islamic Monetary Economics and Finance, 7(1), 77–106. https://doi.org/10.21098/jimf.v7i1.1354

  61. Shinkafi, A. A., Yahaya, S., & Sani, T. A. (2019). Realising financial inclusion in islamic finance. Journal of Islamic Marketing, 11(1), 143–160. https://doi.org/10.1108/JIMA-02-2017-0020

  62. Tabarik, A., & Alfarezel, C. (2025). Evaluation study of Islamic microfinance program based on Islamic social funds (zakat, waqf, and sadaqah). Seriat Ekonomisi, 2(1), 1–8. https://doi.org/10.35335/8eqn3v81

  63. Tok, E., Yesuf, A. J., & Mohamed, A. (2022). Sustainable development goals and islamic social finance: From policy divide to policy coherence and convergence. Sustainability, 14(11), 6875. https://doi.org/10.3390/su14116875

  64. Uddin, M. N. (2020). Role of islamic microfinance institutions for sustainable development goals in bangladesh. Journal of International Business and Management, 1–12. https://doi.org/10.37227/jibm-2020-64

  65. Wang, Z. (2026). Refugee governance. In S. Guo & Y. Gu (Eds.), Global Justice: Theories, Measurements and Rankings (pp. 163–190). Springer Nature. https://doi.org/10.1007/978-981-95-8485-7_8

  66. Weiss, H. (2020). Muslim NGOs, zakat and the provision of social welfare in Sub-Saharan africa: An introduction. In Muslim Faith-Based Organizations and Social Welfare in Africa (pp. 1–38). Springer International Publishing. https://doi.org/10.1007/978-3-030-38308-4_1

  67. Widiastuti, T., Ningsih, S., Prasetyo, A., Mawardi, I., Herianingrum, S., Robani, A., Al Mustofa, M. U., & Hady, A. F. (2022). Developing an integrated model of islamic social finance: Toward an effective governance framework. Heliyon, 8(9), e10383. https://doi.org/10.1016/j.heliyon.2022.e10383

  68. World Bank. (2020). Enhancing financial inclusion through Islamic finance. World Bank.

  69. Youssouf, A. B., & Mostafa, E. H. (2024). Contribution of islamic finance to inclusive growth: A comparative study of the west african economic and monetary union (WAEMU) and north african countries. ISRA International Journal of Islamic Finance, 16(1), 4–20. https://doi.org/10.55188/ijif.v16i1.749

  70. Yusuf, J. A., Ademola, A. A., Muhammed, A. T., & Ayuba, I. A. (2025). The role of Islamic finance and green bonds in promoting sustainable development. International Journal of Islamic Economics and Finance Research, 8(2), 42–53. https://doi.org/10.53840/ijiefer201

  71. Yusuf, J. A., & Adio, S. F. (2025). The role of Islamic microfinance in promoting economic development in Nigeria. Review of Islamic Economics and Finance, 8(2), 261–278.

  72. Yusuf, J. A., Araoye, S. O., Ayuba, I. A., Oladapo, R. M., Tunde, M. A., & Bolaji, A. A. (2025). Convergence or divergence: Comparative analysis of sustainable development goals (SDGs) and Islamic economic principle. Journal of Islamic Economics and Finance Studies, 6(1), 171–186. https://doi.org/10.47700/jiefes.v6i1.10373

  73. Yusuf, J. A., Mumini Oladapo, R., Ismail, A. A., & Tunde, M. A. (2025). The impact of Islamic banking on redistribution of sustainable income. Journal of Islamic Economics and Finance Studies, 5(2), 352–367. https://doi.org/10.47700/jiefes.v5i2.9194

  74. Yusuf, J. A., Yusuf, I. A., Muhammed, A. T., & Ismail, A. A. (2026). Comparative analysis of Islamic and conventional banking in promoting economic stability. JIEF Journal of Islamic Economics and Finance, 6(1). https://doi.org/10.28918/nnvbkj69

  75. Zeb, A., Siddiqi, M. F., Sharif, I., & Adnan, A. (2022). Islamic finance and sustainable development goals. Journal of Finance & Economics Research, 7(2), 66–81. https://doi.org/10.20547/jfer2207205

  76. Zitouni, T., & Ben Jedidia, K. (2022). Does islamic microfinance contribute to economic empowerment in Tunisia?: Case study of zitouna tamkeen. Journal of Business and Socio-Economic Development, 2(1), 67–81. https://doi.org/10.1108/JBSED-10-2021-0143