DMO Announces Conclusion Of Issuance Of N100 Billion Sukuk Bonds For Road Projects

The Debt Management Office (DMO) has announced the conclusion of the issuance of N100 billion Sovereign Al ‘Ijarah Sukuk bond for the construction and rehabilitation of key road projects in the country.

The term Sukuk means financial certificates, also commonly referred to as “sharia compliant” bonds in Arabic.

In a statement on Monday, DMO said that the bond, which was issued on November 21, 2022, and was supported by wide public sensitization to encourage subscription from diverse investors, was oversubscribed to N130 billion due to the over 165 percent subscription level.

The Sukuk was issued at a rental rate of 15.64 percent per annum, bringing the total Sovereign Sukuk issuance to N742.557 billion as of today.

“The level of subscription is evidence of investors’ confidence in the use and impact of Sukuk in the construction and rehabilitation of road infrastructure across the country,” DMO said.

“The DMO appreciates all the investors (Retail Investors, Banks, Pension Fund Administrators, Assets/Fund Managers, Insurances Companies, Ethical Funds, Takaful Operators/Non-Interest Banks, Stockbrokers, Government Agencies, High Net Worth Individuals, Trustees and Unit Trusts) who have continued to support the Federal Government’s infrastructure development efforts through Sukuk financing. The strong participation of retail investor, ethical funds and non-interest financial institutions in this Sukuk Offering, attest to the fact that the Government’s objective of promoting financial inclusion through admitting more retail investors and ethical funds into the financial system is being achieved.

“The DMO on its part, will work to sustain the laudable achievements recorded so far in the use of Sukuk Issue Proceeds for the construction and rehabilitation of Nigerian roads, and thereby, continue to enhance ease of commuting and doing business, safety on our roads, job creation, economic growth, and prosperity of our nation,” the statement added.

The issuance of Sukuk bond by DMO started in September 2017 as a strategy by the Federal Government to support the development of infrastructure, promote financial inclusion and deepen the domestic securities market in the country.

The debut Sovereign Sukuk, which was issued in 2017, brought in N100 billion to finance the rehabilitation and construction of 25 road projects across the six geopolitical zones. The DMO also issued a Sukuk for N100 billion in 2018 and another for N162.55 billion in 2020 as well as about N250 billion in 2021.