WAYS OF FINANCING GOVERNMENT PROJECTS THROUGH ISLAMIC INSTRUMENTS

Abstract

Islamic finance has emerged as a prominent method for financing government projects, primarily due to its ethical foundations and the increasing global acceptance of its principles. This paper examines the various ways in which governments can utilize Islamic financial instruments to fund development and infrastructure initiatives. It specifically addresses the use of Sukuk (Islamic bonds), Mudarabah, Musharakah, Istisna, and Ijarah. Through the presentation of statistical data and relevant visual aids, this study analyzes how these instruments are applied in the financing of government projects, tracks the global expansion of Islamic finance, and explores their alignment with ethical and sustainable development objectives. The paper concludes by discussing the potential opportunities and challenges associated with the use of Islamic finance as a critical tool for government funding.