Federal Government of Nigeria has said the net proceeds from its ongoing N150 billion Sukuk issuance will be used to fund some 53 road projects across the country.
Gatekeepers News reports that Director General, Debt Management Office, DMO, Patience Oniha disclosed this at an investors’ forum on Thursday in Abuja.
Oniha, who stated that the 53 roads cover more than 3,000km, 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.
The DMO Boss said the federal government remains committed to value-driven borrowing through project-focused Sukuk, which has contributed to visible road and bridge projects.
Oniha, while recognising infrastructure’s pivotal role in economic growth, said, “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.
The DMO boss said, “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.”
Oniha, therefore, 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.
According to her, banks are interested in sukuk because of “its tax-exempt status and the liquidity it affords them.”
