The Nigerian government on Monday released the proceeds of the N130 billion Sukuk bond for the development of road infrastructure to the Federal Ministry of Works and Housing and Federal Capital Territory Administration (FCTA).
The Minister of Finance, Zainab Ahmed, and the Director General of the Debt Management Office, Patience Oniha, presented the N130 billion proceeds cheque to the ministries in Abuja.
The federal government had issued the debut Sovereign Sukuk of N100 billion in September 2017, with a tenor of seven years.
The Sukuk is a strategic initiative to support the development of infrastructure, promote financial inclusion and deepen the domestic securities market.
The minister said the FMWH will get N110 billion while the FCTA will get N20 billion in the 2022 Sukuk Issue Proceeds of N130 billion.
She also said the 2022 Sovereign Sukuk of N130 billion will be released as part of the capital expenditure in the 2022 Appropriation Act, which has been extended by the National Assembly to 31 March.
“As at November 2022, N1.88 trillion had been released as Capital Expenditure, which represents about 40% performance when compared to the total Capital Budget of N4.7 trillion. This informed the need to extend the period to implement the capital component of the 2022 Budget.
“It is important to add that beside the immense contributions of Sukuk to the funding of critical road infrastructure, the objectives of deepening the domestic capital market and financial inclusion are being achieved by the Government.
“The private sector and sub-nationals have begun to embrace the instrument and I look forward to seeing more issuances in this regard as this will provide additional asset class for the rapidly growing ethical investors and funds in the economy,” the minister said.
In her remark, the DG said the journey towards issuing a Sovereign Sukuk started some years back when the agency diligently worked with experts to get the process and documentation right.
According to her, the efforts paid off with the issuance of the first Sovereign Sukuk of N100 billion in September, 2017.
“The DMO has issued Sukuk four (4) more times bringing the total amount raised as at December 2022 to N742.56 billion,” Mrs Oniha said.
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“From the Sukuk issued between 2017 and 2021, a total of N612.56 billion was raised and deployed to the construction and rehabilitation of sections of seventy-one (71) roads and four (4) bridges covering a total of 2,820.06km.”
Mrs Oniha commended the implementing ministries and their various contractors for supporting the DMO in the initiative.
“Not surprisingly, the two Ministries are also beneficiaries of the N130 Billion 2022 Sovereign Sukuk, whose proceeds will be similarly deployed to road projects,” she added.
“Through the Sovereign Sukuk initiative, the DMO has demonstrated its strong alignment with the policy of President Muhammadu Buhari, on infrastructural development.
“Furthermore, the DMO has positioned itself not only as an agency for managing the public debt including borrowing on behalf of the Federal Government, but as an active stakeholder in the domestic capital market through innovation, investor engagement and collaboration with other stakeholders.”
She said the DMO remains committed to its mandate and other activities designed to develop the market.
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