THE Debt Management Office (DMO) has announced that the Nigerian government has successfully raised N1.09 trillion through Sovereign Sukuk since they were first introduced in 2017.
In Nigeria, a Sovereign Sukuk, issued by the DMO, is a financial tool that complies with Islamic law (Sharia). It represents shared ownership in specific assets, mainly used to fund infrastructure projects like roads.
Several important roads across the country have been financed using Sovereign Sukuk bonds, with the DMO and the Federal Ministry of Finance overseeing the process.
The DMO states that these funds have been allocated to crucial infrastructure projects, including roads and bridges, throughout Nigeria.
Speaking on Wednesday, March 26, in Lagos during “an all-parties meeting” for the issuance of the seventh series of the Sovereign Sukuk, Director-General of the DMO, Patience Oniha, revealed that the latest series aims to raise approximately N300 billion to finance capital projects.
Reflecting on the progress made, Oniha said, “We recall that the first Sukuk was issued in September 2017. After extensive marketing, the offer, which was for N100 billion with a tenor of seven years, received a total subscription of N105.878 billion.”
Oniha highlighted the achievements over the years, noting, “Following the modest success of the first Sukuk and the achievement recorded from September 2017 to December 2023, the DMO has raised a total of N1.09 trillion.
With this amount, over 4,100 km of roads and nine bridges across Nigeria’s six geopolitical zones and the Federal Capital Territory have either been constructed or rehabilitated.”
The DMO emphasised the significant impact of the infrastructure projects funded by the Sukuk. Benefits include reduced travel times, improved road safety, job creation, and better access to markets for farmers in remote areas.
Furthermore, these projects have increased access to essential public services like education and healthcare, further boosting economic growth.
Oniha pointed out that investors benefit in two ways from their investments in Sukuk: they contribute to the development of infrastructure and receive returns in the form of income paid twice a year.
She noted that the issuance of the Sovereign Sukuk is supported by financial advisers such as Lotus Financial Services Limited, Buraq Capital Limited, Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited, and Vetiva Capital Management Limited.
She further explained that the firms play a vital role by advising on the Sukuk’s structure, managing the offering process, and facilitating investor participation.
The ICIR recently reported that the total public debt portfolio has risen by 24.99 per cent in a space of three months to N121.67 trillion as of March 31, 2024.
DMO disclosed this in its report released on Thursday, June 20.
The report stated that the federal government and the 36 states, including the Federal Capital Territory (FCT), owe $91.46 billion in US dollar terms.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.