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Tag: Sukuk bond

  • FG raises N652bn from Sukuk bond

    FG raises N652bn from Sukuk bond

    The Debt Management Office (DMO) is dedicated to meeting investors’ needs while also promoting the growth of the domestic capital market.

    True to government prediction, the N150 billion Sukuk bond offer has been oversubscribed to the tune of N652.827 billion.

    A statement from the DMO said the bond was oversubscribed by 435% of the amount offered (N150 billion).

    According to the DMO, “This shows that the level of awareness of the product has increased and that investors are willing to support the financing of infrastructure.”

    The strong demand for the Sukuk the DMO added means that “the Debt Management Office allocated N350 billion to the investors who subscribed to the product.

    Read Also: N150 billion Sukuk to fund 53 road projects

    “This money will be used to fund the construction and rehabilitation of roads and bridges across Nigeria’s six geopolitical zones and the Federal Capital Territory.”

    The Director General of the DMO, Ms Patience Oniha has predicted that the N150 billion Sukuk bond it is offering will be over-subscribed.

    The extra funds that will be realised from the Sukuk bond offering she said, will be used for available projects.

    Generally, the subscriptions made from the Sukuk bond Oniha said would go towards financing 53 different road projects measuring over 3,000km, and tolls collected will be used to repay the Sukuk loan.

  • DMO: N100b Sukuk Bond to sustain rehabilitation

    The second issue of the N100 billion Sukuk Fund is aimed at sustaining the 25 key roads in the six-geopolitical zones, the Debt Management Office (DMO) Director-General, Patience Oniha, has said.

    He spoke at the sovereign Sukuk public offer-investor forum in Lagos.

    According to Oniha, the success of the first N100 billion Sukuk Bond issue in 2017 was as a result of the clearer understanding of the financial market, as well as investors, which is arousing the interest of many.

    She recalled that that year, the Sukuk Bond, which recorded 5.8 per cent over-subscription, helped in executing road projects across all the regions of the country, noting that the public’s response to the offer has further affirmed investors’ confidence and created jobs.

    The FBNQuest Merchant Bank Limited Deputy Managing Director, Taiwo Okeowo, expressed delight in participating in the initiative, because it would contribute to narrowing the country’s infrastructure deficit.

    The impact of the Sukuk Bond still reverberates across the country. For instance, the House Committee on Works attested to the impact the Bond has had on critical infrastructure, especially in helping the federal government to mobilise a lot of contractors handling various governments’ projects back to site.

    The committee Chairman, Ali Wudil, while on tour of some projects mostly executed with the Sukuk Bond in Kano State, revealed that most of projects had been abandoned for years, but that the Sukuk Bond had mobilised the contractors back to site.

    “Works are on-going in most of the areas we visited and this is possible because of the Sukuk Bond. Some of these projects were started since 2006 and are not yet completed due to unavailability of funds, which has resulted to review upon review of the projects and you know what that entails. Nevertheless, at committee level, we are satisfied with the level attained and the quality of the jobs being executed,” Wudil said.

    Dantata and Sawoe Project Manager Roy Hungushi, who’s firm is handling the Kano Western By-pass, told the committee that the 26.6-km road awarded since 2007 for N13.2 billion has  escalated to N22 billion due to lack of funds, thereby necessitating the reviews. He said with the Sukuk enabled funding by the government, the company was able to return to site, assuring that with adequate funding, the project would be completed in good time.

    Proceed from the Sukuk Bond II will be used for road projects. For instance, in the Southwest, the bond is to be used for reconstructing Benin-Ofosu-Ore-Ajebandele-Shagamu dual carriageway (Phase 3 and dualisating Ibadan-Ilorin road (Section 2).

    Three roads were identified in Southsouth.  They include the rehabilitation of Enugu-Port Harcourt road, dualisation of Yenagwa road junction-Kolo-Otuoke Bayelsa Palm and that of Lokoja-Benin road (Section 2-4).

    In the Southeast, Onitsha-Enugu Expressway and the Enugu-Port Harcourt road (Section 1-3) would be rehabilitated. While in Northcentral, Loko Oweto Bridge would dualised, Abuja-Lokoja road (Section 1 and 4), Suleja-Minna road (Phase 2) and Lokoja-Benin road (Section 1) would be dualised.

    In the Northeast, Kano-Maiduguri road (Section 2-5), , northwest, Kano-Maiduguri road (Section), Kano-Kastina road (Phase 1) would be also be dualised and  Kano Western bypass and Kaduna Eastern bypass would be constructed.

    Subscribers can purchase N1,000 per unit subject to a minimum subscription of N10,000 and in multiple of N1,000 with FBNQuest. Islamic Wealth Manager, Lotus Capital, manages the sales.

     

  • Fed Govt to float N100b second tranche Sukuk bond

    The Director-General, Debt Management Office (DMO), Ms Patience Oniha, yesterday expressed optimism that the second tranche of N100 billion sukuk bond would be floated before the end of the year.

    Sukuk or Islamic Bond is a financial instrument structured to generate returns to ethical investors without infringing on the Islamic law, which forbids interest payments.

    Oniha told the News Agency of Nigeria (NAN) in a telephone interview that the DMO had made significant progress to ensure successful issuance of the bond before year end.

    “June was when the budget was approved and Sukuk is a project that was also approved in the budget.

    “We will float it; we have made significant progress; we will issue it this year,’’ she said.

    Oniha said the second tranche would be specifically for infrastructure development just like the first one issued in September 2017.

    She said that the DMO was working with the Ministry of Power, Works and Housing on the projects earmarked for the second tranche of the N100 billion Sukuk bond.

    The DG also expressed optimism that the second tranche would be oversubscribed, based on the feelers from investors and the public.

    “We still have auctions regularly, we issue FGN Bonds and they have been oversubscribed. So, whether liquidity is tight or not, we have got good demands. In terms of sukuk, I think from the feelers we have got from investors and the public, it is a product the people want to associate with,’ Onoha said.’

    Some of the roads funded by the bond include the Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-Port/Harcourt Road, Kaduna Eastern By-Pass, Kano-Maiduguri Road and Loko-Oweto Bridge over River Benue, among others.

     

  • N21.5B Sukuk Bond: Why we rejected Bello’s request – Legislator

    The Chairman of the Niger state House of Assembly Special Committee on Sukuk Bond, Honorable Abdulmalik Kabir said that the reason why the committee rejected Governor Abubakar Sani Bello’s request to take the N21.5 bond was due to the need to secure the future of the state.

    Speaking to The Nation after plenary, Kabir noted that with the administration having just one year to go, it seems unreasonable for it to undertake in such a loan that would further put the state in debt.

    “The administration has less than one year to go, why should we put our future at risk? The timing is wrong and the infrastructures to be embarked upon is not cost effective and we would not get value for money. ”

    He noted that most of the projects put in the projects were over priced and the award of contracts did not follow due process.

    “Most of the projects were over priced, when you have a project whose actual cost is N1.9 billion and you have a project cost of N9.1 billion with explanation that the remaining amount is going for contingency cost, it is a total waste.

    “For the contracts, we discovered that there was no tender, no biding and no contract given to show that these process was passed. ”

    The Lawmaker expressed satisfaction in the decision of his committee while disabusing insinuation that the committee rejected the request because they were not financed by the executive.

    “As Legislators, we did our work to satisfy our mandate with conscience. We believed that is the best we can give to the public. We did what we did to secure the future of our state and our children.

    Read Also: Gov. Bello seeks Assembly’s approval for N21.5bn Sukuk bond

    “As far as I am concerned, we, the Committee, did not asked for anything to either be satisfied financially. We believe we have done the right thing. We are not here to be bribed.”

    When asked if the non granting of the bond would stall development in the state, Kabir replied that the state have received a lot of interventions in the past stressing that there is no negative implication of the rejection.

    “There is no implication, the state have been received Paris fund, bail out, salary support interventions amongst others, nothing have been done to it. The rejection would not stop development in the state. “

  • Sukuk Bond: 10 contractors get N100b for 25 road projects

    Sukuk Bond: 10 contractors get N100b for 25 road projects

    The Federal Government on Thursday presented a cheque of N100 billion to 10 contractors awarded the job to construct and rehabilitate 25 road projects across the country.

    Cost of the road projects funded through the Sukuk bond was shared equally at N16.67 billion among the six geopolitical zones to ensure an equal spread of the project.

    Addressing journalists at the cheque presentation in Abuja, the Minister of Power, Works and Housing, Babatunde Fashola, said the gesture was a fulfilment of his promise to the contractors during the September meeting, to address the funding challenge.

    He described the finance as a sign of hope towards the nation’s economic development.

    The contractors are CGC Nigeria Limited, Arab Contractor Nigeria Limited, CCECC Nigeria Limited, Salini Nigeria Limited, Reynolds Construction Company Nigeria Limited and Setraco Nigeria Limited. Others are Dantata & Sawoe Construction Company Nigeria Limited, Eksiogullari Nigeria Limited, Mothercat Limited and Gitto Constrizion Generali limited.

    Some of the projects included: rehabilitation and reconstruction of Enugu-Port Harcourt dual carriage Section II by Arab contractors at N3,750,000,000; dualisation of Lokoja-Benin road by CGC at N2,500,000,000; dualisation of Kano-Katsina road Phase 1 by CCECC at N3,000,000,000; rehabilitation of Enugu-Port Harcourt road section IV by CCECC at N3,500,000,000; dualisation of Yenegwe road junction-kolo-Otuoke by CCECC at N3,500,000,000 and dualisation of Kano-Maiduguri road by CCECC at the sum of N5,000,000,000.

    Others are: Dualisation of Suleja-Minna road in Niger State by Salini at the sum of N3,521,958,532.49; reconstruction and asphalt overlay of Benin-Ofosu-Ore-Ajebandele- Shagamu dual carriageway by RCC at N6,000,000,000; dualisation of Ibadan-Ilorin road Section II by RCC at the sum of N5,666,666,666.67; rehabilitation and reconstruction of Enugu-Port Harcourt dual carriageway Section 1 by Setraco at the sum of N4,000,000,000; Dualisation of Lokoja-Benin road by Dantata & Sawoe Construction Company awarded at the sum of N3,166,666,666.67

    The construction of Kaduna Eastern By-pass in Kaduna state was awarded to Eksiogullari Nigeria Limited at the sum of N4, 666,666,666.67; the dualisation of Kano-Maiduguri road linking Kano-Jigawa-Bauchi-Yobe and Borno States by Mothercat limited at the sum of N3,500,000,000; dualisation of Abuja-Abaji-Lokoja road by Gitto Constrizion Generali limited at the sum of N3,500,000,000 among others.

    In his remark, the Minister of Finance, Mrs Kemi Adeosun said the money would be expended primarily on the road construction projects targeted to open-up opportunities and develop the nation’s economy.

    Describing the bond as first of its type in the country, she said it was about financial inclusion and deepening of the country’s financial sector.

    According to her, the bond was already oversubscribed by investors and other key stakeholders.

    “We are using the money on roads that will open-up potentials of the economy”, Adeosun added.

    The Ministry’s Director of Highway Planning and Development, Engr. Uzor listed the projects based on the order of importance.

    The Financial Advisor, First Bank of Nigeria (FBN) Capital, Mr. Taiwo Okeowo, lauded the federal government for facilitating quick completion of the process.

    The representative of the contractors, Engr. Moussa Nakhla expressed excitement at the development stressing that the contractors would deliver on the projects as expected.

    “Nobody can hide our smiles. We thank the federal government for giving us hope. We believe a lot in this country and we know this country is committed to really helping the people,” Nakhla stated.

  • FG releases Sukuk bond proceeds for 25 road projects

    FG releases Sukuk bond proceeds for 25 road projects

    The Federal Government on Thursday released the proceeds of the N100 billion Sukuk bond for 25 road projects across the country.

    The Minister of Finance, Mrs. Kemi Adeosun, handed over the N100 billion proceeds cheque to the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, in Abuja.

    The federal government had issued the sovereign debut Sukuk of N100 billion in September, which was successfully completed last week.

    The Sukuk bond has a tenor of seven years.

    Adeosun said the offer was oversubscribed to the tune of N105.87 billion.

    She also said the milestone was a sign of confidence in the Nigerian economy and the administration of President Muhammadu Buhari.

    The minister added that the Sukuk proceeds would unlock the potentials of Nigeria.

    She said: “This is the first Sukuk bond issuance for Nigeria. It is about financial inclusion and deepening of our financial markets. The proceeds will be used to further support government capital spending for 2017 – the construction and rehabilitation of 25 key economic roads across the six geo-political zones of the country.”

    “The roads will ease commuting, spur economic activities across the country and further close our infrastructural gap.”

    “Each of the geo-political zones of the country is expected to receive the sum of N16.67 billion for road projects in their respective zones.

    The North Central and South- South Zones accounted for five each of the 25 key economic road projects, while the North East, North West and South East have four road projects each.

    “Three projects are to receive funding from the Sovereign Sukuk proceeds in the South West Zone.”

    Earlier, Fashola commended the Finance Minister, the Director-General of Debt Management Office, Ms. Patience Oniha and the financial advisers for the bond issuance for their painstaking efforts aimed at realising the milestone.

    He assured the ministry’s contractors that the federal government was committed to the funding of its infrastructural projects across the country.

  • Sukuk bond: Aregbesola’s vindication

    When Governor Aregbesola began moves to introduce the Islamic bond, the product attracted so much anger in the Christian fold to the extent that the achievements Governor Aregbesola made in Osun State almost fizzled out. Some of his critics reasoned that Nigeria is a secular state and so the introduction of Islamic bond smacks of Islamising the state. They believe that the introduction of the sukuk bond was not appropriate in view of the destructive activities of Boko Haram.

    To this effect, Nigerians, who lost relations or were injured, maimed or frustrated by the unscrupulous behaviour of Boko Haram, form the bulk of critics of Islamic bond. Some prominent Christian leaders said it will further inflame religious violence. The Christian Association of Nigeria (CAN) also condemned the introduction of Islamic bond because to them it was a ploy to introduce Islamism into Osun State.

    The Independent Corrupt Practices and Other Related Offenceýs Commission (ICPC) has described the petition of the Civil Societies Coalition for the Emancipation of Osun State against Governor Rauf Aregbesola as baseless and unsubstantiated. ICPC, in a letter with reference number ICPC/INV/NGB/T.E2/003, addressed to the petitioner, Chairman, Civil Society Coalition for the Emancipation of Osun State, which was copied to the Osun Secretary to the State Government, stated that its investigations have not established an act contrary to the Corrupt Practices and other Related Offences Act, 2000 as none of the allegations were substantiated.

    The commission stated that having diligently investigated the allegations and finding nothing against Governor Aregbesola, the allegations have been dismissed. The Government, through the Bureau of Communication and Strategy in the Office of the Governor, reminded Nigerians that the ICPC’s final decision was a vindication of the repeated claims by the government that the group was one of those hired for the purpose of tarnishing its name.

    ICPC, in the letter titled, Re: Petition against Osun State Governor- Mr. Rauf Adesoji Aregbesola, for criminal and reckless mismanagement of Osun State funds since November 2010 to August 2015,  held that all of the allegations brought forward have been looked into conclusively with no infraction substantiated.

    According to ICPC, “The above case bordering on fraudulent diversion of N11.4 billion obtained through Osun SUKUK bond to private foreign account, money meant for building of schools regardless of the N13.9 billion intervention funds from the Federal Government through UBEC for the purpose of building classrooms has been investigated conclusively with no infraction substantiated.

    “An investigation ofý the above allegations confirmed that Osun State government raised N11.344 billion from the issue of the SUKUK bond through Nigerian commercial banks. Investigation also revealed that after the issue of the bond, Osun State Government sought and got approvals from the Securities and Exchange Commission and Shariah Board of Lotus Capital Ltd. to amend the schedule of schools to be constructed from 27 mixed schools to 11 high schools and to furnish the schools. The approval of SUKUK holders is still pending.

    “Also contrary to the allegation that the SUKUK proceed was diverted to private foreign account, it was disbursed from Osun SUKUK company accounts with 13 Collecting Nigerian Commercial banks and used for payments of contractors awarded the contracts of construction and furnishing of 11 senior Secondary Schools in various part of Osun State.

    “Furthermore, contrary to the allegation that N13.9 billion was disbursed by UBEC to Osun State, the total of N7,192,585,041.64 has been disbursed to Osun SUBEB for the period 2011-2015. This amount consists of Universal Basic Education matching grants, Special Education Funds, Teachers Professional Development Fund and state’s counterpart funds lodgement in line with UBE Act 2004.

    “In view of the above paragraphs, investigations have not established an act contrary to the Corrupt Practices and Other Related Offences Act, 2000 as none of the allegations were substantiated. Therefore the matter is hereby laid to rest, “ the Commission said.

    The Director, Bureau of Communication and Strategy, Office of the Governor, Mr. Semiu Okanlawon, stating the Government’s position over the outcome of the ICPC’s investigations, said the Aregbesola government was never in doubt that the group was an illegal one which was only being used by traducers of the administration to diminish its many achievements.

    “When the so-called group was everywhere making its highly irresponsible and frivolous allegations, we never minced words on the fact that it was an unregistered group of few disgruntled, hired individuals to tarnish the image of the government and seek to diminish the massive good governance initiatives that are the hallmarks of our interventions here.

    “The ICPC’s dismissal of the frivolous allegations is a vindication of our earlier position on the group and other collaborators in their ignoble campaigns of calumny.

    “The Aregbesola administration has instituted the most transparent, people-friendly government in its six years and more and we do not intend to depart from this path. This is because we are convinced in this lies the brighter future of our dear state,” Okanlawon added.

    The funds were used to finance construction of education projects, among other development initiatives with which Governor Aregbesola hopes to lay a solid foundation for the future of the state. Eleven High Schools with a total of 792 classrooms are at various stages of completion across the state. Two other High Schools are proposed for construction in Osogbo to accommodate the total population of high school students in Osogbo metropolis. There are 11 schools in all to be financed by the sukuk bond.  The bond is exclusively for high school development.

    The High Schools are: Ilesa High School, Wole Soyinka High School, Ejigbo, Ataoja High School, Osogbo, Fakunle Unity High School, Osogbo, Osogbo High School, Adventist High School, Ede are completed, while Oduduwa High School, Ile Ife, Ila High School, Ila-Orangun, Iwo High School, Iwo, Akinorun High School, Ikirun and  Ayedaade High School, Ikire have reached 70% completion.

    When Governor Aregbesola adopted Sukuk, an Islamic bond to help the state execute it projects, his critics were calling for his head. Many said it was part of his ploy to Islamize Osun. Not quite long, the government of United Kingdom also stated its resolve to obtain Islamic bond, Sukuk, to execute government projects. A petition about Governor Aregbesola was sent to ICPC concerning sukuk fund but he has been vindicated.

     

    • Donald sent this piece from Benin City