FG Raises N130bn from Sukuk Sales for Road Infrastructure

By Aduragbemi Omiyale

A total of N130 billion has been raised from the sale of Sukuk for the construction and rehabilitation of road infrastructure across the country.

Business Post reports that on November 21, 2022, the Debt Management Office (DMO) opened for subscription N100 billion Sovereign Al ’Ijarah Sukuk.

However, because of the strong appetite shown by the diverse investors, the size of the offer was increased to N130 billion.

According to a statement issued by the DMO, the exercise recorded over 165 per cent subscription level.

The agency described this as “evidence of investors’ confidence in the use and impact of Sukuk in the construction and rehabilitation of road infrastructure across the country.”

It stated that offers were received for the debt instrument, sold at a rental rate of 15.64 per cent per annum, from 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.

The DMO assured subscribers of the Sukuk that “the proceeds of the 2022 Sovereign Sukuk, like the previous Sukuk issue proceeds, will be used solely for the construction and rehabilitation of key road projects through the Federal Ministry of Works and Housing and the Federal Capital Territory Administration.”

It thanked the investors for supporting the federal government’s infrastructure development efforts through Sukuk financing.

“The strong participation of retail investors, 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,” it stated.

The debt office promised to “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.”