Dipo Olowookere
By Dipo Olowookere
Federal Government has commenced activities in preparation for the issuance of the N100 billion non-interest bearing bond otherwise known as Sukuk.
The exercise is to be carried out by the Debt Management Office (DMO) on behalf of the Nigerian government.
A national roadshow kicked off on Thursday and will hit major cities in the country like Lagos, Port Harcourt, Kano and Kaduna.
The aim is to attract investors to subscribe to the offer as proceeds from the Sukuk issuance would be used to finance specific road projects in the country.
A statement issued by the debt office disclosed that the roadshow is led by the DMO Director-General, Ms Patience Oniha, and accompanied by Financial Advisers, Lotus Capital Financial Services Limited and FBN Merchant Bank Plc.
“Apart from serving as alternative source of funding for the Government, the Sukuk will also serve to diversify the investor base for FGN Securities, promote financial inclusion and deepen the domestic capital market.
“Sukuk are asset-based securities, not debt instruments, and represents ownership in a tangible asset, service, project, business or joint venture.
“This is why Sukuk fits into the DMO debt strategy of borrowing to finance capital projects contained in the budget.
“This ensures that Government borrowings are used to finance development projects which have multiple economic and social benefits for citizens,” the DMO said in the statement.
It was gathered that the debut N100 billion sovereign Sukuk is with a tenor of seven years, and has been certified as ethically compliant by the Financial Regulation Advisory Council of Experts of the Central Bank of Nigeria.
The Offer for Subscription will open in the week after the roadshow and will be advertised in major newspapers.
