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  • DMO: N300b Sukuk attracts over N2.2tr subscriptions

    DMO: N300b Sukuk attracts over N2.2tr subscriptions

    • Oversubscribed by 735%

    Nigeria has recorded a major success in its efforts to raise funds for infrastructure, as the Federal Government’s latest N300 billion Sukuk offer attracted over N2.2 trillion in subscriptions.

    The offer, issued by the Debt Management Office (DMO), was oversubscribed by more than 735 per cent—showing strong interest from investors in this non-interest, Shariah-compliant financial instrument.

    The Sukuk, an Islamic finance-compliant instrument structured to generate returns to investors without infringing on Islamic law, was floated by the DMO on behalf of the Federal Government of Nigeria (FGN) as part of its continued efforts to diversify the country’s funding sources and enhance infrastructure financing. It is the seventh in the sovereign Sukuk series since the instrument was first introduced in Nigeria in 2017.

    According to a statement issued by the DMO, the overwhelming response to the offer demonstrates the growing appetite among investors for non-interest financial instruments, as well as increasing confidence in the government’s borrowing framework and transparency in fund utilisation.

    “The level of subscription received is a strong indication of investors’ belief in the value of the Sukuk product, which also affirms the success of the DMO’s strategy to broaden the domestic investor base while providing ethical investment opportunities to all Nigerians,” the DMO stated.

    A breakdown of the investor profile revealed that subscriptions came from a wide range of stakeholders. These included retail investors, non-interest banks and financial institutions, conventional banks, pension fund administrators, asset and fund managers, and a variety of other institutional investors. The diverse participation reflects a deepening awareness and acceptance of Sukuk as a viable and credible investment option within Nigeria’s fixed-income market.

    Proceeds from the N300 billion raised will be deployed to finance critical infrastructure projects, particularly in road and bridge construction and rehabilitation across all six geopolitical zones and the Federal Capital Territory (FCT).

    This aligns with the current administration’s Renewed Hope Agenda, which places high priority on infrastructure development as a vehicle for job creation, economic stimulation, and national integration.

    The DMO said that infrastructure investments financed through Sukuk have consistently delivered tangible results across the country. Previous issuances under the Sukuk programme have been utilized to complete over 44 key road projects spanning more than 4,000 kilometers, while also improving access to rural and urban communities and reducing travel time and vehicle operating costs.

    Read Also: FG to equip 12 universities with high-fibre internet, 24-hour electricity

    The Series VII Sukuk builds on that legacy by expanding the scope of infrastructure renewal, with several new projects expected to commence or reach completion under this latest funding phase. Project selection is coordinated in partnership with the Federal Ministry of Works and Housing and the Federal Ministry of Finance, ensuring alignment with national priorities and technical due diligence.

    The DMO restated its role in fostering access to safe and liquid investment products while facilitating inclusive participation in the capital market. It also reaffirmed its commitment to supporting the implementation of the federal government’s medium- to long-term development plans, especially those that target inclusive growth through investment in transportation and logistics infrastructure.

    Since the introduction of Sukuk in Nigeria eight years ago, the instrument has become a staple in the portfolio of many public and private institutional investors. It has also drawn participation from retail investors in Nigeria’s underserved non-interest finance market, offering an alternative to conventional bonds and treasury bills.

    The DMO’s innovation in ethical finance has been widely acknowledged within and beyond Nigeria’s borders. It continues to play a central role in mobilizing funds for infrastructure without breaching the fiscal deficit threshold prescribed by the Fiscal Responsibility Act, while improving capital market development through diverse product offerings.

    With the success of the Series VII issuance, analyst Dr. Wahab Balogun, Managing Director and Chief Executive Officer of Ambosit Capital Managers expects Sukuk ‘to remain a recurring feature of the federal government’s domestic borrowing strategy. It is also anticipated that future Sukuk issues could surpass current subscription levels, particularly if investors continue to see transparency, efficient fund deployment, and returns that match their risk appetite and ethical values” he said.

    In the meantime, work is expected to commence shortly on projects earmarked under this latest Sukuk funding tranche.

  • DMO’s N300bn Sukuk attracts over N2.2tr in subscriptions

    DMO’s N300bn Sukuk attracts over N2.2tr in subscriptions

    Nigeria has recorded a major success in its efforts to raise funds for infrastructure, as the federal government’s latest N300 billion Sukuk offer attracted over N2.2 trillion in subscriptions.

    The offer, issued by the Debt Management Office (DMO), was oversubscribed by more than 735 per cent, showing strong interest from investors in this non-interest, Shariah-compliant financial instrument.

    The Sukuk, an Islamic finance-compliant instrument structured to generate returns to investors without infringing on Islamic law, was floated by the DMO on behalf of the Federal Government of Nigeria (FGN) as part of its continued efforts to diversify the country’s funding sources and enhance infrastructure financing. It is the seventh in the sovereign Sukuk series since the instrument was first introduced in Nigeria in 2017.

    According to a statement issued by the DMO, the overwhelming response to the offer demonstrates the growing appetite among investors for non-interest financial instruments, as well as increasing confidence in the government’s borrowing framework and transparency in fund utilisation.

    “The level of subscription received is a strong indication of investors’ belief in the value of the Sukuk product, which also affirms the success of the DMO’s strategy to broaden the domestic investor base while providing ethical investment opportunities to all Nigerians,” the DMO stated.

    A breakdown of the investor profile revealed that subscriptions came from a wide range of stakeholders. These included retail investors, non-interest banks and financial institutions, conventional banks, pension fund administrators, asset and fund managers, and a variety of other institutional investors. The diverse participation reflects a deepening awareness and acceptance of Sukuk as a viable and credible investment option within Nigeria’s fixed-income market.

    Proceeds from the N300 billion raised will be deployed to finance critical infrastructure projects, particularly in road and bridge construction and rehabilitation across all six geopolitical zones and the Federal Capital Territory (FCT). This aligns with the current administration’s Renewed Hope Agenda, which places high priority on infrastructure development as a vehicle for job creation, economic stimulation, and national integration.

    The DMO said that infrastructure investments financed through Sukuk have consistently delivered tangible results across the country. Previous issuances under the Sukuk programme have been utilised to complete over 44 key road projects spanning more than 4,000 kilometres, while also improving access to rural and urban communities and reducing travel time and vehicle operating costs.

    The Series VII Sukuk builds on that legacy by expanding the scope of infrastructure renewal, with several new projects expected to commence or reach completion under this latest funding phase.

    Project selection is coordinated in partnership with the Federal Ministry of Works and Housing and the Federal Ministry of Finance, ensuring alignment with national priorities and technical due diligence.

    The DMO restated its role in fostering access to safe and liquid investment products while facilitating inclusive participation in the capital market. It also reaffirmed its commitment to supporting the implementation of the federal government’s medium- to long-term development plans, especially those that target inclusive growth through investment in transportation and logistics infrastructure.

    Since the introduction of Sukuk in Nigeria eight years ago, the instrument has become a staple in the portfolio of many public and private institutional investors. It has also drawn participation from retail investors in Nigeria’s underserved non-interest finance market, offering an alternative to conventional bonds and treasury bills.

    Read Also: Fed Govt repays first N100b Sukuk

    The DMO’s innovation in ethical finance has been widely acknowledged within and beyond Nigeria’s borders. It continues to play a central role in mobilising funds for infrastructure without breaching the fiscal deficit threshold prescribed by the Fiscal Responsibility Act, while improving capital market development through diverse product offerings.

    With the success of the Series VII issuance, analyst Dr. Wahab Balogun, Managing Director and Chief Executive Officer of Ambosit Capital Managers, expects Sukuk to remain a recurring feature of the federal government’s domestic borrowing strategy.

    It is also anticipated that future Sukuk issues could surpass current subscription levels, particularly if investors continue to see transparency, efficient fund deployment, and returns that match their risk appetite and ethical values,” he said.

    In the meantime, work is expected to commence shortly on projects earmarked under this latest Sukuk funding tranche.

  • Fed Govt repays first N100b Sukuk

    Fed Govt repays first N100b Sukuk

    The Federal Government has successfully repaid its first ever Sovereign Sukuk of N100 billion issued in 2017, thus fulfilling all obligations to investors and reinforcing its commitment to transparent and responsible debt management.

    This milestone was announced yesterday at the Investor Meeting hosted by the Debt Management Office (DMO) in Abuja, during the formal issuance of a new N300 billion Series VII Sukuk.

    It was disclosed that all investors in the 2017 Sukuk have received full redemption of their investments, having earlier been paid their rental returns.

    The structure of the Sukuk issuance ensured that the Central Bank of Nigeria (CBN), serving as the Paying Agent, distributed periodic rental payments to Sukuk holders on scheduled dates. Upon maturity, the government repurchased the underlying road assets, and the principal amounts were transferred in bulk to the Sukuk holders, concluding the investment cycle.

    At the issuance event, Director-General of the DMO, Ms. Patience Oniha, acknowledged recent macro-economic improvements, including the upgrade of Nigeria’s credit outlook by Fitch Ratings. She noted that these developments point to progress in both fiscal and monetary management.

     “It’s a journey. Development doesn’t happen in one day, but current policies are steering the country in the right direction,” Oniha said, referring to the path toward sustainable growth.

    Read Also: Rivers: PDP governors are busy-bodies, Fed Govt tells S’Court

    She linked part of this progress to recent reforms by the CBN, especially those targeting the foreign exchange market.

     According to Oniha, the volatility that previously plagued the Naira has eased considerably since the fourth quarter of last year, thanks to sweeping policy interventions.

     “There’s more transparency now. FX supply has improved, and the rates have become more stable. Some of the measures were difficult at first, but the benefits are beginning to show,” she said.

    Turning to the oil sector, Oniha expressed optimism that recent presidential initiatives will further strengthen revenue from oil and gas, which remain a significant component of national income.

    Commenting on Nigeria’s public debt, she said the total debt stock stood at ₦144.67 trillion as of December 2023, nearly evenly split between external and domestic components. She explained that a major factor in the growth of the debt stock was the depreciation of the Naira, which caused the value of dollar-denominated debts to increase when converted to local currency.

     “The external debt has remained around $42.5 billion, only rising slightly after a $2.2 billion Eurobond in December. But due to the weaker Naira, the debt stock in local terms appears higher,” Oniha said.

    She also noted that the inclusion of Ways and Means advances—amounting to N30 trillion—has contributed significantly to the total debt figures. These are approved borrowings by the government to cover budgetary shortfalls and are officially included in the debt records.

    Oniha reassured investors about the structure and sustainability of Nigeria’s debt. She pointed out that the country’s external borrowing is sourced from a diversified pool including multilateral institutions like the World Bank and African Development Bank, bilateral partners such as China, India, and Germany, and commercial markets such as the Eurobond space.

     “Over 60 per cent of our external debt is from multilaterals and bilaterals, which offer more favourable terms than commercial debt. This diversification reduces our exposure to market shocks and provides stability,” she explained.

    On the domestic side, Oniha described the government’s bond market as very active, with a range of instruments such as Treasury Bills, Federal Government Bonds, Savings Bonds, and Sukuk issued regularly.

     “There’s something for everyone. Whether you are a large institutional investor or a salary earner, there’s an appropriate investment product available. And this variety also means the government is not dependent on one single funding source,” she said.

    She further noted that domestic debt instruments have long tenures—some spanning up to 30 years—and are a key component of the country’s funding strategy. According to her, over 70 per cent of Nigeria’s domestic debt is issued by the Federal Government.

    In assessing the health of Nigeria’s debt profile, Oniha stated that while the debt-to-GDP ratio has crossed 50 percent, it still remains within acceptable limits prescribed by international benchmarks, including those of the IMF, World Bank, and ECOWAS.

     “Public debt sustainability is not just about the size of the debt. It’s about growing revenues and expanding the GDP. As the economy grows and tax revenues increase, our ability to service debt also improves,” she said.

     She commended the National Assembly for passing recent tax bills that are expected to enhance revenue collection and reduce pressure on borrowing. These developments, alongside improved oil receipts and foreign exchange reforms, are laying the foundation for more sustainable public finance.

    The issuance of the new N300 billion Series VII Sukuk is part of the government’s broader infrastructure financing strategy. Proceeds will be used to fund road projects across the country, continuing the legacy of previous Sukuk issues that have helped transform Nigeria’s transportation network.

    The DMO assured of its commitment to investor engagement and transparency, adding that future Sukuk issuances will maintain the same principles of Islamic finance that prohibit interest and ensure asset-backed, ethical investing.

    In recent years, Sukuk has emerged as a critical funding tool for Nigeria, attracting both domestic and foreign investors while supporting infrastructure development. The DMO’s successful record of timely coupon payments and redemptions has helped boost investor trust in Nigeria’s debt instruments.

    With this latest issuance, Nigeria has now deepened its commitment to diversifying funding sources, maintaining debt sustainability, and unlocking infrastructure development for inclusive economic growth.

  • JUST IN: FG repays first N100bn Sukuk

    JUST IN: FG repays first N100bn Sukuk

    The Federal Government of Nigeria has successfully repaid its first ever Sovereign Sukuk of N100 billion, issued in 2017, thus fulfilling all obligations to investors and reinforcing its commitment to transparent and responsible debt management.

    This milestone was announced on Monday at the Investor Meeting hosted by the Debt Management Office (DMO) in Abuja, during the formal issuance of a new N300 billion Series VII Sukuk.

    It was disclosed that all investors in the 2017 Sukuk have received full redemption of their investments, having earlier been paid their rental returns.

    The structure of the Sukuk issuance ensured that the Central Bank of Nigeria (CBN), serving as the Paying Agent, distributed periodic rental payments to Sukuk holders on scheduled dates. 

    Upon maturity, the government repurchased the underlying road assets, and the principal amounts were transferred in bulk to the Sukuk holders, concluding the investment cycle.

    At the issuance event, Director General of the DMO, Ms. Patience Oniha, addressing investors at the event, acknowledged recent macroeconomic improvements, including the upgrade of Nigeria’s credit outlook by Fitch Ratings. She noted that these developments point to progress in both fiscal and monetary management.

    “It’s a journey,” Oniha said, referring to the path toward sustainable growth. “Development doesn’t happen in one day, but current policies are steering the country in the right direction.”

    She linked part of this progress to recent reforms by the Central Bank of Nigeria, especially those targeting the foreign exchange market. According to Oniha, the volatility that previously plagued the Naira has eased considerably since the fourth quarter of last year, thanks to sweeping policy interventions.

    “There’s more transparency now. FX supply has improved, and the rates have become more stable. Some of the measures were difficult at first, but the benefits are beginning to show,” she said.

    Turning to the oil sector, Oniha expressed optimism that recent presidential initiatives will further strengthen revenue from oil and gas, which remain a significant component of national income.

    Commenting on Nigeria’s public debt, she said the total debt stock stood at ₦144.67 trillion as of December 2023, nearly evenly split between external and domestic components. She explained that a major factor in the growth of the debt stock was the depreciation of the Naira, which caused the value of dollar-denominated debts to increase when converted to local currency. 

    “The external debt has remained around $42.5 billion, only rising slightly after a $2.2 billion Eurobond in December. But due to the weaker Naira, the debt stock in local terms appears higher,” Oniha said.

    She also noted that the inclusion of Ways and Means advances, amounting to N30 trillion, has contributed significantly to the total debt figures. These are approved borrowings by the government to cover budgetary shortfalls and are officially included in the debt records.

    Oniha reassured investors about the structure and sustainability of Nigeria’s debt. She pointed out that the country’s external borrowing is sourced from a diversified pool, including multilateral institutions like the World Bank and African Development Bank, bilateral partners such as China, India, and Germany, and commercial markets such as the Eurobond space

    “Over 60 percent of our external debt is from multilaterals and bilaterals, which offer more favourable terms than commercial debt. This diversification reduces our exposure to market shocks and provides stability,” she explained.

    On the domestic side, Oniha described the government’s bond market as very active, with a range of instruments like Treasury bills, Federal Government Bonds, Savings Bonds, and Sukuk issued regularly.

    “There’s something for everyone,” she said. “Whether you are a large institutional investor or a salary earner, there’s an appropriate investment product available. And this variety also means the government is not dependent on one single funding source.”

    She further noted that domestic debt instruments have long tenures—some spanning up to 30 years—and are a key component of the country’s funding strategy. According to her, over 70 percent of Nigeria’s domestic debt is issued by the federal government.

    In assessing the health of Nigeria’s debt profile, Oniha stated that while the debt-to-GDP ratio has crossed 50 percent, it still remains within acceptable limits prescribed by international benchmarks, including those of the IMF, World Bank, and ECOWAS.

    Read Also: Fed Govt launches N300b Sukuk for road projects

    “Public debt sustainability is not just about the size of the debt,” she said. “It’s about growing revenues and expanding the GDP. As the economy grows and tax revenues increase, our ability to service debt also improves.”

    She commended the National Assembly for passing recent tax bills that are expected to enhance revenue collection and reduce pressure on borrowing. These developments, alongside improved oil receipts and foreign exchange reforms, are laying the foundation for more sustainable public finance.

    The issuance of the new N300 billion Series VII Sukuk is part of the government’s broader infrastructure financing strategy. Proceeds will be used to fund road projects across the country, continuing the legacy of previous Sukuk issues that have helped transform Nigeria’s transportation network.

    The DMO assured of its commitment to investor engagement and transparency, adding that future Sukuk issuances will maintain the same principles of Islamic finance that prohibit interest and ensure asset-backed, ethical investing.

    In recent years, Sukuk has emerged as a critical funding tool for Nigeria, attracting both domestic and foreign investors while supporting infrastructure development. The DMO’s successful record of timely coupon payments and redemptions has helped boost investor trust in Nigeria’s debt instruments.

    With this latest issuance, Nigeria has now deepened its commitment to diversifying funding sources, maintaining debt sustainability, and unlocking infrastructure development for inclusive economic growth.

  • Fed Govt launches N300b Sukuk for road projects

    Fed Govt launches N300b Sukuk for road projects

    The federal government is seeking to raise some N300 billion through a new Sukuk issuance as part of efforts to diversify government’s funding sources and accelerate the pace of infrastructural development.

    The N300 billion Sovereign Sukuk is a seven-year Sukuk due 2032; a non-interest, alternative instrument designed in a form of annual rental income. The annual rental income is 19.75 per cent. Sukuk is a non-interest, asset-backed instrument, based on the principles of Islamic finance.

    The Debt Management Office (DMO), which oversees Nigeria’s government debt issuances and management, indicated yesterday that the offer would open today with a minimum subscription of N10,000. The offer closes on May 20, 2025.

    The Sukuk serves the dual purposes of diversifying government’s funding for critical national infrastructural projects and also expanding the domestic investment market to meet the need of ethical investors.

    The Sukuk is being offered at N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.

    READ ALSO: Corruption and failed refineries

    The rental payment will be made half-yearly while the bullet repayment will be done on the date of maturity.

    As a sovereign issuance, the Sukuk is backed by the full faith and credit of the Federal Government and it qualifies as securities in which trustees can invest under the Trustee Investment Act. It also qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors. It is also classified as liquid asset by the Central Bank of Nigeria (CBN) and certified by the Financial Regulation Advisory Council of Experts of the CBN.

    The N300 billion Sukuk will be listed on the Nigerian Exchange (NGX) and FMDQ Securities Exchange Limited upon completion.

    Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, described the Sukuk as a high-yielding investment with predictable cashflows.

    According to him, the Sukuk provides a good route for wealth accumulation and investment compounding.

    “Aside from the fact that it is a gilt edge bond that is covered by the full faith and credit of the Federal Government, this particular instrument has good rate of return at nearly 20 per cent. It also provides an excellent investment outlet for ethical investors that do not what interest-based investment to put their investments in,” Amolegbe said.

    He noted that the Sukuk is recognised as a liquid asset as it can be converted to cash within two days on securities exchanges.

    Sources said the government could raise more than N300 billion, citing the historical issuance trend.

    The federal government had in 2017 launched its sovereign Sukuk issuance as a strategic initiative to support the development of critical infrastructure, promote financial inclusion and deepen the domestic securities market.

    Sukuk as an alternative instrument to conventional bonds and it is based on the tenets of Islam which prohibits usury or lending with interest payments.  Sukuk does not indicate the existence of any debt obligation as the issuer uses the proceeds from the certificate to purchase an asset, of which the investor also receives partial ownership.

    Nigeria’s N150 billion third sovereign Sukuk issuance had recorded oversubscription of N519.12 billion, sustaining a trend of oversubscription that started with the maiden issuance 2017. The Federal Government had in June 2020 issued a N150 billion seven-year Ijarah Sukuk due June 2027 with approximate rental of 11.200 per cent per annum.

    The Federal Government had in September 2017 floated its first sovereign Sukuk, a N100 billion seven-year issue with a rental rate of 16.47 per cent. It was oversubscribed by 5.8 per cent. Government followed in 2018 N100 billion seven-year tenored Sukuk Al Ijarah (Lease) with annual rental rate of 15.743 per cent. It was also oversubscribed.

    Director General, Debt Management Office (DMO) Ms Patience Oniha, had said the government recognised the need to issue more Sukuk bonds given the increasing success and strong investor’s appetite for the alternative non-interest bonds.

    According to her, the Sukuk initiative by DMO, which oversees national debt management, has been increasingly successful given the strong level of awareness that has been created.

    She attributed the success of the Sukuk issuances to the increased confidence from market participants given that the Sukuk bonds are tied to specific projects that can be tracked.

    “Looking ahead, we recognise the need to upscale issuances to include other standalone projects beyond road infrastructure, but more importantly, we are looking to support projects that are revenue generating to service the Sukuk,” Oniha said.

  • Fed. Govt. raises N1.09tr through sovereign Sukuk for infrastructure development

    Fed. Govt. raises N1.09tr through sovereign Sukuk for infrastructure development

    • Reps to probe N1.242 trillion Sukuk funded road projects

    The Federal Government has successfully raised a total of N1.09 trillion through the issuance of Sovereign Sukuk since 2017. This fund has been channeled into infrastructure development projects across the country. The Director-General of the Debt Management Office (DMO), Patience Oniha, disclosed this yesterday in Lagos during an all-parties meeting convened ahead of the issuance of the seventh series of the Sovereign Sukuk. She further revealed that the government plans to raise an additional N300 billion in the upcoming series to finance capital projects.

    Also yesterday, the House of Representatives directed it’s Committee on Works to conduct a forensic probe into the allocation, expenditure, and outcomes of the N1.242 trillion Sukuk funds raised from 2017 to 2024. The committee is to identify the utilisation, instances of diversion, inflation, or contractor noncompliance.

    Oniha described the meeting as an opportunity to assess the progress made in leveraging Sukuk financing for national development. She recalled that the first Sovereign Sukuk was issued in September 2017 following an extensive marketing campaign. That initial offering, set at N100 billion with a seven-year tenor, attracted a total subscription of N105.878 billion.

    “Building on the achievements recorded from September 2017 to December 2023, when the last Sukuk was issued, the DMO has now raised a cumulative N1.09 trillion,” she stated.

    With the proceeds from these issuances, the government has constructed or rehabilitated more than 4,100 kilometers of roads and nine bridges across Nigeria’s six geopolitical zones, including the Federal Capital Territory.

    Read Also: Police arrest cook over alleged $35,000 theft, rescue kidnapped woman

    According to Oniha, these projects have brought significant improvements, such as reduced travel time, enhanced road safety, and increased employment opportunities.

    Additionally, she noted that the improved road infrastructure has eased market access for farmers in remote areas, facilitated better access to public services such as education and healthcare, and contributed to broader economic growth.

    Beyond infrastructure development, Oniha pointed out that the continued issuance of Sukuk has been driven by several factors, including its project-specific nature, its role in promoting financial inclusion, and its contribution to the growth of Nigeria’s domestic financial market.

    She further noted that the Sukuk instrument has been well received by investors, as demonstrated by the level of subscriptions recorded in past issuances. Investors, she explained, not only derive satisfaction from financing infrastructure development but also earn returns, which are paid semi-annually.

    Meanwhile, in a resolution following a motion of urgent public importance sponsored by Gaza Jonathan Gbefwi (SDP, Nasarawa) the House asked the ministry of works to provide the Committee on Works with detailed real-time records of all Sukuk-funded projects, including financial disbursements, project statuses, and contractor performance as at date and to be updated every quarter.

    He recalled that since 2017, the Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), has raised over N1.1 trillion through six Sovereign Sukuk issuances to finance 124 federal road projects spanning 5,820 kilometres across the nation’s six geopolitical zones, with the most recent data from the SEC in December 2024 confirming this amount (approximately $657.6 million USD at current exchange rates).

    According to him, the Sukuk financing breakdown includes N100 billion (2017), N100 billion (2018), N162.557 billion (2020), N250 billion (2021), N130 billion (2022), and N350 billion (2023), with indications from posts on various reports suggesting an additional N150 billion was issued in October 2023, pushing the cumulative total to approximately N1.242 trillion by the end of 2024, pending official DMO confirmation for late 2024 issuances.

    He said despite this significant investment, Nigeria’s road infrastructure remains in a deplorable state, with over 70% of the country’s 200,000-kilometer road network still unpaved, as noted by S&P Global Ratings in January 2024.

    He expressed concern that without robust accountability mechanisms, the Sukuk program risks becoming a conduit for mismanagement or corruption.

  • Fed Govt opens trading on N350b Sukuk

    Fed Govt opens trading on N350b Sukuk

    The federal government has listed its N350 billion Ijarah Sukuk on the Nigerian Exchange (NGX) and FMDQ Securities Exchange, providing existing and new investors opportunities to trade on the 10-year non-interest instrument.

    The N350 billion Sovereign Sukuk is a 10-year Ijarah Sukuk due 2033; a non-interest, alternative instrument designed in a form of a lease with rental rate. The rental rate is 15.75 per cent. Sukuk is a non-interest, asset-backed instrument, based on the principles of Islamic finance.

    The Debt Management Office (DMO), which oversees Nigeria’s government debt issuances and management, had floated the Sukuk through a special purpose vehicle- FGN Roads Sukuk Company 1 Plc, which is applying the net proceeds of the Sukuk to development of identified roads.

    Read Also: PFAs invest N672.1b in real estate, SUKUK, others’

    The DMO had indicated that the net proceeds would be used “solely for the construction and rehabilitation of key road projects and bridges across the six geopolitical zones of the country”.

    As a sovereign issuance, the Ijarah Sukuk is backed by the full faith and credit of the Federal Government and it qualifies as securities in which trustees can invest under the Trustee Investment Act. It also qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors. It is also classified as liquid asset by the Central Bank of Nigeria (CBN) and certified by the Financial Regulation Advisory Council of Experts of the CBN.

    The federal government had raised N362.6 billion in three previous issuances which were hugely oversubscribed.

    The federal government had in 2017 launched its sovereign Sukuk issuance as a strategic initiative to support the development of critical infrastructure, promote financial inclusion and deepen the domestic securities market.

    Sukuk as an alternative instrument to conventional bonds and it is based on the tenets of Islam which prohibits usury or lending with interest payments. 

  • Fed Govt raises N652billion from Sukuk bond

    Fed Govt raises N652billion from Sukuk bond

    The 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 over-subscribed to the tune of N652.827 billion.

    A statement from the Debt Management Office (DMO) said the bond was over-subscribed 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.”

    Read Also: Obari Gomba wins 2023 $100,000 NLNG prize

    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.

    “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.”

    Director General of the DMO, Ms. Patience Oniha, had predicted that the N150 billion Sukuk bond it was offering would  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 Sukuk bond, Oniha said, will go towards financing 53 different road projects measuring over 3,000km, and tolls collected will be used to repay the Sukuk loan.

  • N150 billion Sukuk to fund 53 road projects

    N150 billion Sukuk to fund 53 road projects

    The federal government will use the net proceeds of its ongoing N150 billion Sukuk issuance to fund some 53 road projects across the country.

    Director General, Debt Management Office (DMO), Ms. Patience Oniha, at an investors’ forum yesterday in Abuja, said the 53 roads cover more than 3,000km.

    She said the tolls collected from the roads will be used to repay the Sukuk. Sukuk is a non-interest, asset-backed bond that is based on the principles of Islamic finance.

    Mr. Hassan Usman of Buraq Capital Limited and former Managing Director of Jaiz Bank described Sukuk as an attractive ethical instrument with stringent project approval and disbursement mechanisms.

    He emphasised its efficiency and assured that funds raised would strictly serve their intended purpose.

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    Oniha said the federal government remains committed to value-driven borrowing through project-focused Sukuk, which has contributed to visible road and bridge projects.

    Recognizing infrastructure’s pivotal role in economic growth, she stated, “infrastructure is an enabler of economic development.”

    She expressed optimism that the N150 billion Sukuk would be oversubscribed, noting that the extra funds that may be realised will be used for available projects.

    According to her, government’s optimism in the over subscription of the Sukuk is based on the fact that the federal government has made significant investments in infrastructure development, through which it has managed to raise a total of N742 billion.

    She said the massive investment serves as a strong example or evidence of the high level of interest and enthusiasm that investors have shown in Sukuk.

    According to Oniha, “the government and people involved believe in the use of Sukuk and plan to continue offering it every year. The hope is that ethical investors will invest in the Sukuk.”

    She invited ethical investors to take advantage of the opportunities present in sukuk to participate in subscribing to the offer. She encouraged widespread participation, highlighting that Sukuk VI’s proceeds would fund projects across the country’s six geopolitical zones.

    The DMO boss noted that banks are interested in sukuk because of “its tax-exempt status and the liquidity it affords them”.

    Ms. Oniha stressed the importance of infrastructure for attracting investors and economic growth. She acknowledged the government’s resource limitations and the need to involve the private sector in infrastructure funding.

    The N150 billion 10-Year Ijarah Sukuk is set to mature in October 2033, offering a rental rate of 15.75 percent per annum.

    In Abuja, Sukuk proceeds have already supported road construction projects, addressing critical infrastructure needs.

    It’s worth noting that Nigeria was ranked 130th out of 141 economies in the 2019 Global Competitive Index Report for infrastructure quality.

  • Fed Govt offers N150b Sukuk for infrastructure

    Fed Govt offers N150b Sukuk for infrastructure

    The Federal Government yesterday launched a N150 billion Sukuk issuance to raise funds for the construction and rehabilitation of roads and bridges across the country.

    The Debt Management Office (DMO) yesterday opened application list for subscription to the N150 billion Ijarah Sukuk.

    Sukuk is a non-interest, asset-backed instrument, based on the principles of Islamic finance.

    According to a statement by the DMO, the Sukuk is issued by Federal Government of Nigeria (FGN) Roads Sukuk Company PLC, on behalf of the Federal Government.

    It said the Sukuk were offered at N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.

    “Rental payment is made half-yearly, and bullet repayment is done on the date of maturity.

    “Proceeds will be used solely for the construction and rehabilitation of key road projects and bridges across the six geopolitical zones of the country,” the DMO said.

    It added that the Ijarah Sukuk was backed by the faith and credit of the Federal Government.

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    “It qualifies as securities in which trustees can invest under the Trustee Investment Act.

    “Qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors.

    “To be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited,” it said.

    It added that the Ijarah Sukuk was classified as liquid asset by the Central Bank of Nigeria (CBN) and certified by the Financial Regulation Advisory Council of Experts of the CBN.

    News Agency of Nigeria (NAN) reports that the Sukuk is a Sharia-compliant instrument that represents the interests of the owner in an asset or pool of assets.

    It ensures that every financial activity is backed by real economic activity, is usually linked to specific infrastructure projects.