Sukuk bond: Nigerian govt releases N41 billion for road rehabilitation

Babatunde Raji Fashola
Minister of Works, Power and Housing, Babatunde Raji Fashola

The sum of N41 billion has been released to the Power, Works and Housing Ministry from the Sukuk bond raised for road rehabilitation by the Nigerian government, PREMIUM TIMES has learnt.

Hakeem Bello, spokesperson to the Minister of Power, Works and Housing, Babatunde Fashola, made this known in an exclusive interview, Friday afternoon.

He also told PREMIUM TIMES that the ministry had initially received N22 billion from the fund with which it paid the beneficiary contractors handling the projects.

He, however, noted that as at Thursday, all claims from contractors had been forwarded to the Debt Management Office, DMO, for an ‘authorisation clearance’ that must be endorsed by the DMO and Trustees before additional funds were released to the Ministry’s Sukuk account.

“Total payment on Sukuk is now N41 billion as at today (Friday),” he said on Friday afternoon.

The Nigerian government issued the debut Sovereign Sukuk of N100 billion in September 2017, with a tenor of seven years.

The bond was raised to facilitate the rehabilitation of 25 key economic road projects across the country.

In October, the Minister of Finance, Kemi Adeosun, handed over the N100 billion proceeds cheque to the Mr. Fashola.

Mrs. Adeosun, who disclosed that the offer was oversubscribed to the tune of N105.87 billion, said the milestone was a sign of confidence on the Nigerian economy and the administration of President Muhammadu Buhari.

She also explained that the Sukuk proceeds would unlock the potentials of Nigeria.

Speaking with PREMIUM TIMES on Friday, Patience Oniha, Director General at DMO explained the payment procedure.

She said the funds were being released in bits in order to ensure that they are used to execute the targeted projects, and to ensure that the milestones set aside for the project were met.

“As per the Sukuk, there are two trustees (in the capital market) and we have to get approval from the regulatory bodies. They will have to review the job completion certificate and say it is okay.

“The Sukuk money is disbursed through the Cash Management Office and the Office of the Accountant General who authorises payment to MDAs.

“So payment has been made (to the Ministry of Power); not N100 million because there is a milestone which must be completed. It’s not that you just give the money out. When that milestone is completed, the ministry issues the job completion certificate and then payment is authorised.”

The DMO boss explained further that the Sukuk fund cannot be moved into the agency’s general account but into a separate Sukuk account with the CBN.

“The Ministry of Power itself has a dedicated Sukuk account. So for the Sukuk, there are specific roads and the money can’t go to another road.

“There are trustees, like I said, so we couldn’t have moved all the N100 million to Power (Ministry) and let them use it for any other project. There is a trustee and there are milestones to be met,” she explained.

She said the milestones put in place and the inclusion of the two trustees were part of government’s measures to ensure that the funds are monitored and judiciously used to facilitate the projects for which the Sukuk was raised.


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