The Former Prime Minister Ali Lotfi has warned that directing the yield of sukuk to finance the budget deficit will put the government in trouble as it will not be able to provide sukuk holders with the profits, and thereby the government's debts will aggravate. He affirmed that the government shall direct the yields on sukuk towards financing developmental projects and new investments, rather than existing investments. On the sidelines of a conference titled “Islamic Sukuk Finance between Reality and Expectations (Advantages and Caveats)" held at Ain Shams University, Lotfi called for creating a national and societal dialogue on the sukuk law before being approved by the Shura Council (upper house of parliament). “As there is a law prohibiting the issuance of financial instruments violating the Islamic Sharia law, there will be no use of naming the sukuk “Islamic"," he continued. He affirmed that sukuk will not substitute conventional financing instruments. There are many conditions that shall be considered in order to make the sukuk law succeed such as creating national dialogue and inviting all concerned bodies and experts to the dialogue. Egypt shall benefit from the experiences of other countries which apply the sukuk financing scheme such as Malaysia, Bahrain, UAE and Saudi Arabia, he noted. Lotfi emphasized the importance of conducting economic and feasibility studies about sukuk so as to ensure that the new financing instrument will achieve profits for the holders and the issuers.
