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DMO To Support Revenue-Generating Projects

Debt Management Office (DMO) says it is looking to support revenue-generating projects.

Gatekeepers News reports that the Director-General of the Debt Management Office (DMO), Patience Oniha, said the agency is aiming at assisting revenue-generating projects to service funds raised via Sukuk issuance.

The federal government of Nigeria has raised about N362.6 billion through Sukuk bond. The funds have been deployed for road projects across the country.

Oniha made this known at the third edition of the Islamic Finance News Nigeria Road show, organised by Nigerian Exchange (NGX) Limited in collaboration with REDMoney Group.

She stated that the Sukuk initiative by DMO Nigeria had been increasingly successful, “this success can also be attributed 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.

“Furthermore, there must be a focus on growing and diversifying the investor base for the Sukuk as well as other investment products.”

The Chief Executive Officer, NGX, Temi Popoola, in his address as the keynote speaker, said according to the Islamic Finance Development Report 2020, the Islamic finance industry’s assets grew by 14 per cent in 2019 to $2.88 trillion, returning to its long-term pattern of strong growth after the slowdown in 2018.

Popoola said, “In Nigeria, the Islamic finance sector continues to grow with increased interests from market participants and a growing number of players including two Islamic banks, four takaful insurance companies, and several microfinance banks and managed funds.

“Following the issuance of the first Sukuk in Sub-Saharan African – the Osun State N11.4 billion 7-year Ijarah Sukuk in 2013, the increasing demand for ethical investments in Nigeria has further led to three successful Sukuk issuances totalling N362.6 billion by the Debt Management Office on behalf of the federal government of Nigeria from 2018 till date; all of which were largely oversubscribed and have been listed on NGX.”

Popoola while expressing NGX’s commitment to building this asset class, said the exchange would continue to provide an efficient and liquid market for investors and businesses in Africa. This will help save and access Shariah-compliant capital and investments.

He said, “Our collaboration with RedMoney in convening the annual IFN Nigeria forum attests to our belief in the potential and importance of Islamic finance in catalysing inclusive economic recovery and a more sustainable global economic growth.

“We will collaborate with all market stakeholders to contribute towards the growth of Islamic finance in Nigeria and Africa at large.

“In Nigeria, the Islamic finance sector continues to grow with increased interests from market participants and a growing number of players including two Islamic banks, four takaful insurance companies, and several microfinance banks and managed funds.

“Following the issuance of the first Sukuk in Sub-Saharan African – the Osun State N11.4 billion 7-year Ijarah Sukuk in 2013, the increasing demand for ethical investments in Nigeria has further led to three successful Sukuk issuances totalling N362.6 billion by the Debt Management Office on behalf of the federal government of Nigeria from 2018 till date; all of which were largely oversubscribed and have been listed on NGX.”

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